About using the Time and material project type for a fixed-price project
Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012
Projects that are sold at a fixed price are usually set up as Fixed-price projects. However, in some cases you might benefit from setting up a project as a Time and material project even though the project is sold at a fixed price. Time and material projects are generally easier to set up and execute because they do not require the use of the estimate system.
Generally, when a project contract involves a large sum of money, the project is expected to last for an extended period of time, and the schedule for recognizing revenue does not match the invoicing schedule, the Fixed-price project type is the most appropriate type.
However, if you are managing projects that have fixed prices and smaller contract values that will be fully invoiced within a single fiscal period, a Time and material project type might be suitable. In this situation, you would set the project up as a Time and material project and invoice the customer through fee transactions. No other transaction types would be billed to the customer.