Most Fixed-Price Software Quotes Are Fiction
Not dishonest, exactly. Just a number attached to a description too vague to price, which everybody involved quietly expects to be revised later. A fixed price is only worth anything if certain things are true first — so here is what those are.
How the Cheapest Quote Becomes the Dearest Invoice
It is rarely deception. It is a pricing strategy that works because buyers compare the only number they have been given.
The pattern is familiar to anyone who has commissioned a building. The tender comes in low, the variations arrive monthly, and the final account bears little relation to the figure that won the work. Software works the same way and has fewer surveyors.
Four Things That Have to Be True First
If all four hold, a fixed price is a genuine transfer of risk from you to us. If any one fails, it is a number waiting to be renegotiated.
The scope names rules, not features
Not a booking system, but who can cancel, how late, whether a refund is automatic, what the confirmation email says and what happens when two people book the same slot. Features are cheap to write down and expensive to assume.
The assumptions are written down
Which browsers, which devices, how many languages, whose brand guidelines, what the third-party system we are integrating with actually provides. An assumption stated in the proposal can be checked before signature. An assumption in somebody's head becomes an argument.
Contingency is disclosed, not hidden
Every honest fixed price contains some. Ours is visible in the proposal as a line rather than smeared invisibly across the estimate, so you can see what we are uncertain about and argue with it if you disagree.
The estimator is the builder
The people who priced the work are the people who will do it. Where a salesperson estimates and an engineer inherits the number, the engineer spends the project explaining why it was wrong, and you pay for that conversation one way or another.
Work We Will and Will Not Put a Single Number Against
Well Suited
A first release whose shape you can describe. Replacing a process that already runs on spreadsheets, because the rules exist even if nobody has written them down. A customer portal on top of a system you already operate. A defined integration between two systems that both have documentation. An accessibility remediation programme against WCAG 2.2 AA with a known audit as the starting point. A rebuild of something that exists and works, where the requirement is the current behaviour.
Suitable With a Carve-Out
Most projects with one genuinely unknown component: an integration with an ageing supplier system nobody can get documentation for, a performance target against data volumes nobody has measured, or an AI feature whose accuracy cannot be promised before it is tried. We fix the price of everything else and put that one part on a small, separately agreed time-boxed investigation. You still get certainty over ninety per cent of the cost.
Needs Discovery Before a Number
Where the requirement is real but nobody has agreed what it is — three departments with three different accounts of the same process, say, which is the normal condition in a multi-site business or a housing association. The answer is a short paid discovery producing a scope and a prototype. That is itself fixed price, and it usually costs a fraction of the build it prevents you overspending on.
Not Honestly Quotable
Open-ended research. A product that will be redesigned by whatever the first hundred users do. Work whose scope depends on a third party who has not yet agreed to anything. Anything where the deadline is fixed, the scope is fixed and the budget is fixed at the same time, because one of those three has to give and pretending otherwise wastes everybody's quarter. For these, a dedicated team is the honest instrument.
How the Figure Is Built, Step by Step
Typically five to ten working days from first call to proposal, and none of it costs you anything.
A conversation about the business, not the app
Half an hour on what you are trying to change: who does the work today, what it costs, where it goes wrong. Half the features people ask for turn out to be solving a problem a different feature solves more cheaply.
A written scope at the level of screens and rules
We write it, you correct it. Every screen listed, every rule stated, every integration named, and an explicit list of what is not included. This document is the thing the price is attached to, so the arguments are worth having now.
Estimated piece by piece by the people building it
Each screen and each rule gets its own estimate from the engineers who will do the work, with an allowance for testing, review and store submission. One number for a whole project is a guess wearing a suit.
Risky parts flagged, carved out or time-boxed
Anything we cannot estimate confidently is named in the proposal as such, with the approach we would take and what it might cost. Nothing uncertain gets buried in an average.
One proposal, one sterling figure, assumptions attached
A single total excluding VAT, the milestone schedule, the delivery window, the visible contingency line and the list of assumptions. If the figure is wrong for your budget we will show you what to cut rather than shaving the estimate and hoping.
Every Payment Attached to Something You Can Inspect
No payment falls due for a date passing or a report being written. Each one has an object attached to it.
| Milestone | What has to exist before it is invoiced | Share of total |
|---|---|---|
| Signature | Agreement signed, engineers reserved for your dates, accounts and repositories created in your company name | 25% |
| Design sign-off | Every screen designed and a clickable prototype you have walked through and approved in writing | 20% |
| Mid-build demo | The core journeys working in a build you can open on your own device and hand to a colleague | 25% |
| Delivery | Feature complete against the scope, deployed to your own accounts, submitted to the stores where applicable, documentation handed over | 20% |
| Acceptance | The 30-day defect period closed, with anything that did not match the scope fixed at no charge | 10% |
Percentages are the usual shape rather than a rule; on longer builds the middle is split into more, smaller milestones so neither side is ever carrying much exposure. Intellectual property assigns to you on final payment, and the accounts are yours from week one regardless — see NDA and IP.
What Happens When You Want Something Different
You will want something different. Every project changes; the question is only whether the mechanism is written down beforehand.
The swap, which nobody expects to be offered
If a change is roughly the same size as something already in scope that has become less important, you can exchange them at no cost. Clients are routinely surprised this is allowed. It is the honest position: we sold you a quantity of engineering, not a specific list of screens, and a product that reflects what you learned during the build is worth more than one that matches a document written in January.
Small things are not charged
Wording, colours, field order, moving a button, an extra column in an export. Pricing a fifteen-minute change costs more in administration than doing it, and a supplier who raises a change request for every adjustment is one you will stop talking to, which is bad for both of us. The change process exists for work measured in days, not minutes.
Invoicing, Terms and What Happens If Payment Is Late
How we invoice
In sterling, excluding VAT, with VAT at the prevailing rate added on the invoice. Your purchase order number goes on it where your finance system needs one. Standard terms are 30 days from invoice date, by bank transfer. Monthly arrangements can go on Direct Debit through GoCardless if that is easier for your bookkeeper.
If an invoice goes past due
We ring you, because it is nearly always an approval stuck in somebody's queue rather than a decision. If a milestone invoice remains unpaid beyond 14 days we pause work at a clean boundary and tell you before we do, rather than quietly slowing down. Nobody benefits from a project being run at half attention.
The statutory position
Commercial contracts in the UK carry a right to statutory interest and fixed compensation on late payment under the Late Payment of Commercial Debts (Interest) Act 1998. It is in our terms because it is in the law, and we have no appetite for using it. A conversation about cash flow is always cheaper than a claim, for both of us.
If It Takes Longer Than We Said, You Do Not Pay for That
That is the entire point of the arrangement and it is not a favour. We priced the work, we were wrong about it, and the cost of being wrong sits with the party who made the estimate. On a build that runs over, the invoices stay exactly as scheduled and the engineers keep working. It has happened, it will happen again, and it is priced into how we operate rather than treated as an emergency.
The corollary is that we will not agree a scope we think is optimistic just to win the work. An estimate we do not believe is a deferred argument, and you would rather have the argument in the proposal.
Where the line actually sits
- The integration was harder than we expected — our cost, your invoice unchanged
- A defect found after delivery that contradicts the scope — fixed free inside the 30-day period
- You asked for something the scope does not describe — a priced change request
- A third party changed their API mid-build — neither side caused it, so we talk before anybody invoices
- The scope was ambiguous and we each read it differently — we split it, and we write it better next time
Questions About Quotes and Invoices
Is the quoted figure inclusive of VAT?
No. Proposals state a single sterling figure excluding VAT, and VAT at the prevailing rate is added on each invoice. We quote that way because most of our clients are VAT registered and reclaim it, so an inclusive figure would misrepresent the real cost to them. If you are not VAT registered, say so at the proposal stage and we will show you the gross figure as well, because for a charity or a small partnership the difference is a real number rather than a bookkeeping entry.
Can you work to our purchase order and our 30-day payment terms?
Yes, and it causes no friction provided the purchase order is raised before the milestone it covers. We invoice a UK limited company in sterling with your purchase order number on the invoice, payable 30 days from the invoice date, normally by bank transfer. Where a finance department needs a supplier form, insurance details or bank details verified by telephone before setting us up, ask for all of it at the start rather than at the first milestone, because that process regularly takes longer than the design phase.
Do you ask for money before any work starts?
Yes. A quarter of the total is invoiced on signature, before the first day of work. It buys the engineers being reserved for your dates rather than somebody else, and it is the point at which a project becomes real rather than a maybe. Everything after that is paid against something you can inspect: approved designs, a build you can open, software running in your own accounts. We do not ask for the full amount up front and we would be wary of anybody who does.
Will you quote against a specification our previous agency wrote?
We will read it, and we will usually come back with questions rather than a number. Specifications written to win work tend to describe features rather than rules, and the rules are where the cost lives. A document may say the system handles refunds; what decides the price is who may authorise one, whether a partial refund is allowed, what happens to the VAT, and what the accounting system expects to receive afterwards. We will happily reuse the structure and the research. We will not price a document we have not interrogated, because a quote built on assumptions we have not tested becomes our problem the moment it is wrong.
Does the fixed price include hosting, app store fees and third-party services?
No, and that is deliberate. Cloud hosting, the annual Apple Developer Programme fee, the one-off Google Play registration, paid APIs, mapping, SMS and email providers all sit on accounts in your own company name and are billed to you by those suppliers directly. The fixed price covers our work, including setting those services up and configuring them. We would rather you saw the real cost of running your product from the first month than have it hidden inside our invoice with a margin attached, because that figure matters when you are pricing your own product.
What if we are not happy with the quality at the end?
There is a defect period of 30 days after delivery during which anything that does not behave as the agreed scope described is fixed at no charge. That is different from something you have changed your mind about, which is a change request, and we will say which category we think a report falls into rather than quietly absorbing it or quietly refusing it. The deeper protection is structural: you have seen a working build every fortnight, so the end of the project should contain no surprises. If you first see the software at delivery, something went wrong months earlier.
Get a Scope You Could Show Another Supplier
Send over what you have and we will turn it into a written scope and a single sterling figure excluding VAT, usually within a week. The scope is yours either way.