Fixed price or time and materials: which contract suits your software build?
Fixed price suits work whose scope can be written down before it starts; time and materials suits work whose scope you expect to discover as you go. We quote builds at a fixed price, usually within 48 hours of a short call, with milestone payments set out in the contract. When the scope is too unclear to price honestly, we suggest a two-week Discovery Sprint first rather than padding the quote.
Updated 20 October 2026 · facts about other services come from their own pages, dated below
How do the options compare?
| What matters | Fixed price | Time and materials |
|---|---|---|
| Who carries the risk of an overrun | The supplier. If the agreed scope takes longer than planned, the price does not move. | You. Every extra hour is billed, so the final cost is known only at the end. |
| How you pay | Against milestones: a payment falls due when a defined piece of work is delivered. | Against time sheets, usually weekly or monthly, at an agreed hourly or daily rate. |
| When the scope changes | A change is usually priced separately before it is built, so changes are slower but you see their cost in advance. | You redirect the team whenever you like, and the bill follows. |
| How much you have to manage | Less day to day. You review milestones and accept or reject them against the written scope. | More. Someone on your side sets priorities each week and watches the hours. |
| What it needs before work starts | A scope both sides understand: users, screens, integrations, and what is excluded. | A rate, a team and a way of tracking hours. The scope can be loose. |
| How CountryDevs uses it | Every build. You get one price and milestone payments set out in the contract. | Maintenance only: a monthly block of hours (4, 12 or 30), with extra hours at ₹3,000 or $60 agreed before the work starts. |
Which should you pick, and when?
Fixed price: pick it when
You can describe the first release, your budget is set, and you want to compare suppliers on the same scope. Most first builds of a product fit here once the scope is written down.
Time and materials: pick it when
The work is open-ended: improving a live product month by month, research where nobody knows the answer yet, or a team you will steer every week. You have someone who can set priorities and read time sheets.
Who pays when a fixed-price project runs over?
The supplier does, which is why fixed-price quotes carry a margin for risk or a tightly written scope. Read the exclusions as carefully as the price: what a quote leaves out is where later invoices come from.
Under time and materials the overrun is yours, so the useful questions are different: is there a cap, how often will you see hours against progress, and who decides when to stop.
How are changes handled under a fixed price?
In most fixed-price contracts, a change to the agreed scope is priced separately before anyone builds it. That slows changes down a little, and it also means you see what each change adds to the total before you agree to it. Ask any supplier, us included, to write down in the contract how changes are priced.
The cure for many change requests is a clearer scope at the start. In our Discovery Sprints the scope and a clickable prototype come first: for a customs broker's ERP we mapped six regulatory milestone flows and listed the ten questions the client had to answer before a firm quote was possible.
Why do milestone payments matter more than the headline price?
Milestones tie each payment to something you can see working, so you never pay far ahead of what has been delivered, and the supplier is never far behind on cash. A large payment up front for an entire build leaves you holding the risk.
Ask that each milestone names what will be delivered and how you will accept it: a screen working on a test build, an API that a probe has exercised, a release on a store's testing track.
Where does time and materials make more sense?
After launch. A live product needs small fixes, dependency updates and features that nobody can list a year ahead, and pricing each one separately wastes everyone's time. Our maintenance plans are a monthly block of hours: 4 on Care (₹20,000 or $350), 12 on Grow (₹45,000 or $900) and 30 on Partner (₹95,000 or $2,000), with a three-month minimum and then 30 days' notice.
It also suits research work where the answer is genuinely unknown, though even then a short fixed-scope study often beats open hours: for BogarInfra's card scanner we tested four AI models on the same 29 images before choosing which one to ship.
When are we the wrong choice?
- You want a fixed price but cannot yet say who the users are or what the first release must do. Start with discovery, ours or anyone's.
- You want a team's hours to reprioritise every week for months. That is time and materials, and we only sell it as maintenance hours.
- You need a binding quote today for a product with undocumented integrations. We will ask questions first.
Questions people ask
Can a fixed price that arrives within 48 hours be trusted?
For a product whose scope is clear after a short call, yes: the price is built from that scope and we stand by it. When the scope is not clear, we say so and suggest discovery instead of sending a number we would have to pad.
Do you ever bill by the hour?
Only for maintenance. Each plan is a monthly block of 4, 12 or 30 hours, and extra hours cost ₹3,000 or $60, agreed before the work starts. Builds are always quoted at a fixed price.
Is time and materials riskier for the client than a fixed price?
The cost risk is, because every overrun is billed to you. It can still be the right contract for open-ended work, as long as there is a cap, regular reports of hours against progress, and someone on your side setting priorities.
What is a capped time-and-materials contract?
Hourly billing with a ceiling: the supplier bills actual hours up to an agreed maximum, and work beyond it needs your approval. It shares the overrun risk between the two sides and suits work that is mostly, but not fully, scoped.
Who decides when a fixed-price milestone is finished?
The contract should. Each milestone needs a written acceptance test, for example a set of screens working on a test build, so that "done" is checked against the scope rather than argued about.
Sources
- CountryDevs pricing and payment policy (web app service FAQ) (checked 20 October 2026)
- Discovery Sprint (checked 20 October 2026)
- App maintenance plans (checked 20 October 2026)
- Customs broker ERP discovery (checked 20 October 2026)
- BogarInfra: four-model card-scanner test (checked 20 October 2026)