Pre-Payment and Fixed Fee Billing Terms

1. Material Condition and Adherence to Billing Schedule

The Parties acknowledge and agree that adherence to the billing triggers and payment schedule described in the applicable Order Document is a material condition of the Agreement and such Order Document. Any deviation from the established billing schedule is subject to mutual written consent of both Parties.

Company shall invoice Bill-To Party for all billing related to the Order Document, unless otherwise specified in the Order Document or an applicable Change Order.

2. Fixed-Fee Billing Model and Project Phases

2.1 General Structure

The fixed-fee billing model divides the Engagement into distinct phases, each with defined deliverables and associated billing triggers. The specific phases, amounts, and billing triggers will be detailed in a Billing Schedule table within the applicable Order Document.

Each phase represents a distinct deliverable or achievement milestone. The structure typically includes:

• Initial Phase: Foundation or discovery work required before main project activities
• Development/Implementation Phases: Core project work divided into logical milestones
• Completion Phase: Final deliverables and project closeout activities
• Post-Implementation Support Phase: Ongoing support following project completion
• Optional/Conditional Phases: Additional services that may be triggered based on specific circumstances or client requests

2.2 Billing Triggers

Each phase is associated with a specific Billing Trigger, which is the event that authorizes Company to generate an invoice for that phase. Common billing triggers include:

• Prior to start of engagement or specific phase
• Upon completion of deliverables for a phase
• Upon formal acceptance of deliverables by Client or Bill-To Party
• At the commencement of a support period
• Upon request for optional services
• Percentage-based triggers (e.g., 50% upon phase completion, 50% upon acceptance)

2.3 Total Project Price

The total project price represents the sum of all phase amounts as defined in the Order Document Billing Schedule. This total may include:

• Fixed amounts for each standard project phase
• Conditional amounts for optional services
• Estimated costs for materials, subscriptions, or third-party services (if applicable)

3. Phase-Specific Billing Terms

3.1 Initial Phase

The Initial Phase of the project shall be invoiced in advance, with full payment required and due prior to the commencement of any project activities. The Client and Bill-To Party acknowledge that project initiation is contingent upon receipt of payment for this initial phase as stipulated in the invoice.

Failure to remit payment for the Initial Phase will result in delay or cancellation of project commencement, and Company shall have no obligation to begin work until payment is received and cleared.

3.2 Subsequent Phases

Subsequent project phases will be invoiced upon the successful completion of their respective billing triggers as defined in the Order Document Billing Schedule.

For the avoidance of doubt:

• Each milestone represents a distinct deliverable or achievement as detailed in the Order Document
• Payment for each subsequent phase is triggered only after the correlating milestone has been met
• Where acceptance is required, formal acceptance by Client or Bill-To Party must be documented in writing
• Company may suspend work on subsequent phases until payment for completed phases is received

3.3 Post-Implementation Support Phase

If a Post-Implementation Support phase is included in the Order Document, it will be invoiced at the start of the support period. Payment for the full amount associated with this phase is due at or before the commencement of support activities.

Failure to remit payment at the required time may result in delays or suspension of Post-Implementation Support services. Company is under no obligation to provide support services until payment is received and cleared.

Extension of Support Period

The Parties acknowledge that the Post-Implementation Support period may be extended beyond the original term set forth in the Order Document. Any such extension shall be subject to the execution of a mutually agreed Change Order prior to the completion of the original support period, with terms, scope, and associated costs to be detailed therein.

Extensions requested after the original support period has ended may be subject to different pricing and terms than the original support phase.

3.4 Optional and Conditional Services

The Order Document may include optional or conditional services that are invoiced only if specifically requested by Client or triggered by specific circumstances. Examples may include:

• Rollback or restoration services
• Emergency response services
• Extended hours or weekend work
• Additional training sessions
• Specialized consulting services

For any optional or conditional service:

• The service will be invoiced at the time it is requested or the triggering condition occurs
• Payment must be received and cleared prior to scheduling or performing the service
• The specific amount and payment terms will be defined in the Order Document

4. Material and Subscription Costs

4.1 Estimated Material Costs

Where applicable, the Order Document may include estimated annual or one-time costs for materials, subscriptions, licenses, or third-party services required for the project or ongoing solution operation. These may include:

• Cloud infrastructure and hosting costs
• Software licenses and subscriptions
• Third-party service fees
• Hardware or equipment costs
• Per-user or per-seat licensing costs

4.2 Billing for Material Costs

Material and subscription costs may be billed in one of the following ways, as specified in the Order Document:

• Included in Fixed Fee: Material costs are estimated and incorporated into the total project price
• Pass-Through Billing: Actual costs are invoiced separately as incurred, potentially with an administrative fee
• Client Direct Payment: Client establishes direct accounts and pays vendors directly
• Prepaid Pool: Client funds an account from which material costs are deducted as incurred

4.3 Cost Variance

Estimated material costs are subject to change based on:

• Actual usage or consumption
• Vendor pricing changes
• Changes in project scope or requirements
• Selection of alternative solutions or vendors

Company will notify Bill-To Party of any material variance from estimated costs. If actual costs are expected to exceed estimates by more than the threshold specified in the Order Document (or 10% if not specified), Company will seek approval via Change Order before incurring additional costs.

5. Invoice Generation and Payment Due Dates

5.1 Invoice Timing

Invoices will be generated and delivered to Bill-To Party upon the occurrence of the applicable billing trigger for each phase. For phases requiring pre-payment, invoices will be generated and delivered with sufficient advance notice to allow for payment processing prior to the required payment deadline.

5.2 Payment Due Dates

Unless otherwise specified in the Order Document, payment for each invoice is due upon receipt for pre-payment phases, or within the timeframe specified in the invoice for other phases (typically ranging from immediate payment to NET15, depending on the nature of the billing trigger and any credit terms extended).

5.3 Payment Methods

Bill-To Party shall remit payment via methods acceptable to Company, which may include:

• Wire transfer or ACH
• Business check
• Credit card (may be subject to processing fees)
• Other methods as mutually agreed

6. Consequences of Non-Payment

6.1 Work Suspension

If Bill-To Party fails to make any payment when due, Company may, at its sole discretion:

• Suspend all work on the project
• Refuse to commence subsequent phases
• Withhold deliverables pending payment
• Terminate the Engagement for cause as described in Termination for Cause

6.2 Late Fees and Interest

Late fees and interest shall apply as described in the [::SectionLink:late-payments—finance-charges:Late Payments – Finance Charges:/terms/billing-and-credit-terms/general-billing-terms::] section of the General Billing Terms, unless different terms are specified in the Order Document.

6.3 Additional Remedies

All remedies specified in the Chronic Late Payment as Material Breach section shall apply to fixed-fee engagements, including but not limited to:

• Voidance of non-competition and confidentiality restrictions on Company
• Forfeiture of intellectual property rights by Bill-To Party
• Right to pursue collection costs and legal remedies

7. Billing Disputes

Billing disputes shall be handled in accordance with the Disputed Invoices provisions in the General Billing Terms.

For fixed-fee billing structures, Bill-To Party acknowledges that:

• Disputes regarding deliverable quality or acceptance do not excuse payment obligations unless the dispute is resolved in Bill-To Party‘s favor
• The burden of proof for demonstrating non-completion of a milestone rests with Bill-To Party
• Good faith disputes must be raised promptly upon invoice receipt, with specificity as to the deficiency claimed

8. Change Orders and Scope Modifications

8.1 Changes Requiring Adjustment

Any changes to project scope, deliverables, timeline, or other material terms may require adjustment to the billing schedule and total project price. Such changes must be documented in a Change Order executed by both Parties prior to implementation.

8.2 Change Order Billing Impact

A Change Order may:

• Add new phases or milestones with associated costs
• Modify amounts for existing phases
• Adjust billing triggers or payment timing
• Remove phases or services with corresponding credit or refund (subject to work already performed)
• Modify material cost estimates or provisions

8.3 No Unauthorized Changes

Company is under no obligation to perform work outside the scope of the Order Document without an executed Change Order. Any work performed at Client‘s request but outside the Order Document scope may be invoiced separately at Company‘s standard rates, or may be refused by Company until a Change Order is executed.

9. Records and Documentation

9.1 Company Records

Company shall maintain reasonably detailed records of:

• Deliverables completed for each phase
• Acceptance documentation from Client or Bill-To Party
• Invoices generated and payments received
• Change Orders executed
• Material costs incurred (if applicable)

9.2 Audit Rights

Upon reasonable prior notice and not more than once per year, Bill-To Party may request to review relevant billing records of Company to verify invoice accuracy for amounts billed within the prior year. Such review will be:

• At Bill-To Party‘s expense
• During normal business hours
• Subject to confidentiality requirements
• Limited to records directly related to the specific Order Document in question

If the review finds a material overcharge (e.g., more than 5% over-billing for completed work) and Company concurs or an independent auditor confirms it, Company shall promptly issue a correcting credit or refund.

10. Integration with General Billing Terms

These Pre-Payment and Fixed Fee Billing Terms supplement and, where in conflict, supersede the [::SectionLink::General Billing Terms:/terms/billing-and-credit-terms/general-billing-terms::] for :Engagements utilizing a fixed-fee billing structure.

All provisions of the General Billing Terms not specifically addressed or contradicted herein continue to apply, including but not limited to:

• Late payment fees and interest calculations
• Chronic late payment consequences
• No refunds or credits policies
• Engagement expiration provisions

11. Applicability

These terms apply to any Engagement where the applicable Order Document specifies a fixed-fee or milestone-based billing structure, including pre-payment arrangements. The specific phases, amounts, billing triggers, and other financial details are determined on a per-engagement basis and documented in the applicable Order Document.

Bill-To Party and Client acknowledge that by executing a Order Document that references these terms, they agree to be bound by all provisions herein as if fully set forth in the Order Document itself.