Payment Models: Monthly Retainer vs Scoped Proposal
There are several ways to fund a software project. This article seeks to clarify two of those payment models:
A retainer based project is one where the client deposits funds with the development company in order to retain a commitment of focus from the company for a certain number of hours each month. The development company works closely with the client to define and prioritize the work on a daily, weekly or other defined periodic basis. The development company discusses the used and available time, tracks their time detail, and provides a detailed accounting of time billed against the available balance.
A scoped proposal based project is one where all details of of a project (“the full scope”) is defined before a project begins so that a full project price can be determined. The development firm commits that they understand the scope and features and commit to complete it for a certain price. The Client also commits that they agree to the scope and feature and agrees to pay a specific price.
|Scope Preparation Time||Low||High|
|Changing Priority of Features||Easy||Medium|
|Clarity of Software Project Size||Less||More|
|Financial Risk of Beginning Project||Lower||Higher|