Project revenue models

When creating a new project in Scoro, you’ll find the Revenue model setting under the Budget settings tab. Choosing a revenue model for your project serves as the financial rulebook for your project, defining the following:

• The role of the project budget – is it a revenue anchor, revenue ceiling, or an indicative reference? 
• How to calculate, forecast, and recognize revenue based on the commercial agreement with your client.

This article provides an overview of Scoro's revenue models, how they affect data and calculations, and how to choose the right revenue model for your project.

1. What are revenue models?

The revenue model is a project-level setting in Scoro, located in the Budget settings tab of the project modify view, that determines how Scoro interprets the project budget and calculates, forecasts, and recognizes revenue based on the commercial agreement. This ensures that your project metrics reflect your actual client contracts—regardless of how you configure your budget—and remain consistent globally across Scoro.

There are three revenue models you can choose from:

• Fixed fee
• Time & Material capped
• Time & Material uncapped

1.1. Fixed fee

With the Fixed fee revenue model, the project budget serves as a definitive revenue anchor. Here’s what that means for your project:

• Impact of actual work done: Logged hours (represented as earned revenue) do not change your total project revenue. Instead, they measure your team’s effort and indicate your project’s financial health:
  • Under-budget (Earned < Budget): If you complete the project sooner and spend less effort than budgeted, Scoro still recognizes the full budgeted amount as your project revenue, resulting in a higher profit margin.
  • Over-budget (Earned > Budget): If your team over-serves the client and logs more work than the budget can cover, your project revenue remains locked at the budget limit. Your profit margin drops, and relevant financial metrics in the project’s summary bar turn red to warn you that you are losing money on those extra hours.
• To invoice: The To invoice column in the Profit tab in the project detailed view suggests invoicing the client for the total budgeted amount, even if more work was done.
• If the total budget is missing: Scoro treats a project without a total budget specified in its budget settings as a zero-budget project. The forecasted revenue will display ‘N/A’, and any logged work will immediately be flagged as red (over-budget) in the project’s summary bar. To prevent this, always use the quoted budget or set the total budget manually in the project’s budget settings.

1.2. Time & Material capped

With the Time & Material capped revenue model, the project budget serves as a strict revenue ceiling. Here's what that means for your project:

• Impact of actual work done: Logged hours (represented as earned revenue) directly increase your project revenue, up to the defined budget ceiling:
  • Under-budget (Earned < Budget): If the delivered work remains below the budget ceiling, your project revenue matches the actual value of the hours logged, resulting in your expected profit margins.
  • Over-budget (Earned > Budget): If your team logs more hours than budgeted, your project revenue stops increasing and remains locked at the budget ceiling. Your profit margin drops, and the relevant financial metrics in the project's summary bar turn red, warning you that you are over-servicing the client with unpaid effort.
• To invoice: The To invoice column in the Profit tab in the project detailed view suggests billing the client for the actual work delivered when under budget, automatically capping it at the total budgeted value once you reach that ceiling.
• Revenue recognition: Earned revenue that goes beyond the budget ceiling is not automatically recognized, ensuring your income reports accurately reflect what you are legally allowed to claim.
• If the total budget is missing: Scoro treats a project without a total budget specified in its budget settings as a zero-budget project. Because your ceiling is effectively zero, any logged work will immediately turn red (over-budget), and your forecasted revenue will show ‘N/A’. Always ensure you use a quoted budget or set a total budget manually to establish your contract ceiling.

1.3. Time & Material uncapped

With the Time & Material uncapped revenue model, the project budget acts as an indicative planning reference. Here's what that means for your project:

• Impact of actual work done: Every single logged hour is fully billable. Your actual effort (represented as earned revenue) drives your project revenue directly and infinitely:
  • Under-budget (Earned < Budget): Your project revenue matches the actual hours logged, scaling naturally as work progresses.
  • Over-budget (Earned > Budget): Even if you completely overshoot your reference budget, your project revenue continues to grow with every logged hour. Financial metrics in the project's summary bar stay neutral (green) because there is no system-imposed cap or threat of unpaid work.
• To invoice: The To invoice column in the Profit tab in the project detailed view suggests invoicing the client for the full value of all actual work logged, regardless of whether you are under or over your reference budget.
• Revenue recognition: All earned revenue from actual work performed is fully and automatically recognized, with no system-imposed limits.
• Budget health reference: The project budget is used purely as a planning benchmark. In tools like the Budget Health chart, Scoro displays this reference budget alongside your actual earnings strictly for comparison.
• If the total budget is missing: Unlike other models, leaving the budget empty does not negatively impact your financial calculations. Since there is no ceiling to compute, your revenue and forecasts continue to calculate smoothly. Comparison metrics against a reference budget will simply be unavailable.

2. Comparison of all revenue models

Here’s a brief comparison overview of the various project revenue models and what projects they are best for:

3. How revenue models affect financial calculations

Your selected revenue model dynamically changes how project data is populated, structured, and flagged in various views and sections in Scoro:

• Summary bar in the project detailed view
• Budget tab in the project detailed view
• Work in progress (WIP) report

In the summary bar in the project detailed view:

• The Forecasted revenue at completion metric works differently for each revenue model:
  • Fixed fee: Equals the budget and is not affected by the completed or planned work.
  • Time & Material capped: Based on the completed and planned work, capped at the budget once earned revenue reaches it.
  • Time & Material uncapped: Based on all completed and planned work without capping.
• The Forecasted earned revenue at completion metric takes into account all completed and planned work, but the value indicator may be colored differently for different revenue models when going over budget:
  • Fixed fee and Time & Material capped: The metric value is shown in red, indicating that you’re exceeding the budget.
  • Time & Material uncapped: The metric value stays black (neutral) because the budget serves as a reference only and doesn’t limit actual revenue upon completion.
• The Forecasted profit margin shows the expected profit margin based on forecasted cost and forecasted revenue at completion.
• The project metric card tooltips also dynamically adapt to the chosen revenue model, letting you quickly understand how it’s calculated.

For a full breakdown of what each metric available in the project summary bar means, how it’s calculated, and how revenue models impact their calculations, see our detailed Project metrics guide.

In the Budget tab in the project detailed view:

• The Budget health sub-tab visualizes your budget progress over time, where the budget health chart data and visuals adapt directly to the revenue model:
  • Used budget and forecasted earned revenue lines in the chart turn red for Fixed fee and Time & Material capped projects as soon as the completed or planned work goes over your budget. For Time & Material uncapped projects, these lines remain the same color even when the budget is exceeded.
  • The Forecasted profit (the colored part of the chart) adapts dynamically:
    • For Fixed-fee and Time & Material capped projects, it shrinks as costs rise.
    • For Time & Material uncapped projects, it scales continuously with your actual and planned billable work.
• In the Revenue sub-tab:
  • For Fixed fee and Time & Material capped projects, the calculated and suggested values in the Recognized and Forecasted rows are strictly capped at your total budget ceiling when work or planning exceeds the limit.
  • For Time & Material uncapped projects, both the Recognized and Forecasted row values track actual logged effort and scheduled tasks dynamically over time, growing infinitely without any system-enforced budget constraints.
• The Profit sub-tab includes the Earned column, which shows revenue so far based on logged time and the selling price, with outsourced services factored in once invoiced to the client. This column pulls the exact same figures mapped to the global Total earned value in your project’s Revenue sub-tab, making cross-tab verification effortless.

In the Work in progress (WIP) report:

• The Forecasted revenue column displays the following for each revenue model:
  • Fixed fee: The locked, flat-fee contract budget
  • Time & Material capped: Total of done and planned work, with the total automatically capped at the budget ceiling if your team has planned more hours than the contract allows
  • Time & Material uncapped: Total done and planned work, uncapped
• The Forecasted profit is adjusted accordingly in case the costs rise:
  • Fixed fee and Time & Material capped: If your team logs or plans for excess hours, your costs will rise while your forecasted revenue remains capped, resulting in a drop in your forecasted profit.
  • Time & Material uncapped: Since every planned or logged hour increases both your costs and your billable revenue, your forecasted profit scales dynamically while preserving healthy margins.
• The Income to date column shows the same values as the Earned column under the Budget tab > Profit sub-tab of the project detailed view.

Learn more about the WIP report.

4. Selecting a revenue model for a project

When creating a new project, the Fixed fee revenue model is selected by default, but you can always choose any of the available models as needed:

1. Open the Budget settings tab.
2. In the Revenue models section, click on the right revenue model for your project.

For more guidance on creating a new project, see our detailed one-off and retainer project creation guides.

5. Permissions related to revenue models

Revenue model and other budget settings can be modified by project managers and other users with the “Modify projects of other users” or “Modify projects of other users if a member” permission enabled in their permission set. Viewing monetary values or margin details requires the “View project income and cost” permission.

Learn more about permission sets.

6. Frequently asked questions

Can I invoice more than the project budget allows?

Although Scoro automatically calculates the revenue to recognize based on the project's selected revenue model, you can always bill your client as needed.

Can I change the project’s revenue model after the project is created?

While you can change the model in the project modify view at any time, we generally don’t recommend doing so, as this directly affects how various monetary metrics are calculated to reflect the new model's rules.

What revenue model is applied to projects created via API?

New projects created through external integrations and via Scoro's API are always assigned the Fixed fee revenue model by default.