We believe that transparency is the best foundation for building productive and effective relationships with our clients.
Transparency concerns all the aspects of our cooperation, financial matters being some of the most important.
This article explains our approach to signing payment agreements, issuing invoices to customers and managing accounts.
In the process of negotiating the project, we always discuss the types of payment agreement with the purpose of determining the one that would suit both our client and us and would fit the goals of our project as well.
Below are the payment agreement types we use in our cooperation with clients.
For each project, we select the option best matching its scale and complexity.
1. Prepayment agreement. This model is based on advance payments per sprint or feature if its implementation takes longer than the duration of every single sprint.
The prepayment amount is based on the number of man-hours within the sprint duration. It is calculated by multiplying the number of hours by the rate of each team member participating in the sprint.
Prepayment agreements are the preferred model for relatively small projects.
2. Retainer agreement. It is the optimal model for projects of a larger scale.
According to such agreement, the client is requested to pay for the final sprint of each team member’s work in the project (typically, 70 hours). All other sprints are paid for upon the completion of each one.
At the end of the project, we issue no bill for the last sprint, as it was already paid for with the retainer amount.
The retainer amount may vary, as it is directly related to the number of developers engaged in the final sprint of the project.
For example, the costs of UI and UX design are hardly ever included in the retainer, as the design is usually completed before the application development starts.
Retainer agreements are a convenient payment model for remote collaboration. When we charge a retainer, we ensure that we receive the full amount due to us for the project.
For each project, we appoint an engagement manager who negotiates the payment terms with the client.
After the most suitable agreement type has been determined, we can sign the contract.
We send the contract to the client as a PDF file that the client should sign. After signing the contract, all financial matters are handled by our account manager.
Invoicing and account management
For issuing bills for our services, we use FreeAgenet.
Our account manager prepares invoices and sends them to the client on a regular basis – usually upon the completion of each sprint – together with screenshots showing the development progress according to the tasks in Jira.
All invoices are due for payment within five working days after the invoice issue date.
All payments related to the project should be made by bank transfer.
In case of prolonged or recurrent payment delays, we may suspend the project development until all payments have been received.
Together with invoices, the account managers prepare financial reports that include the following data:
- estimated total hours
- estimated hours and costs spent on each service
- estimated hours and costs balance
- rates for each service
- summary of the already issued invoices
- initial upside and downside estimations for the client to compare and check the use of their budget.
We always try to keep the project costs within the downside estimate while also trying to bring the expenditures closer to the upside estimate, so that our client’s money is used for the things that are indeed necessary.
Sometimes, with effective work, a project may be completed with a surplus that we return to the client upon the project completion.
At the same time, any revisions suggested by the client during the development may exceed the initially planned budget. In such cases, we will issue invoices for the higher amounts required to complete the project.
The account manager’s responsibility is to resolve any misunderstandings between the client and us.
Therefore, they are always prepared to provide any additional information on the financial matters that the client may ask for.
The account manager always has up-to-date information on the current status of the invoicing, financial reports and the general progress of the project.
After the project has been completed, we prepare the final project report and provide it to the client.
At the same time, the account manager contacts the client asking to describe their experience of the developed product.
In addition, the account manager asks whether the client permits their project to be referred to as one of Anansi’s case studies.
After completing the development, we suggest signing another contract for support services provided by our staff.
If the client agrees, they may decide on the duration of the support services.
Within the scope of support services, we allocate about 20 to 35 hours per week to fix detected bugs, make improvements to the product, fine-tune the design and make the necessary updates.
We sign support contracts only along with the prepayment.
Depending on the project specifics, we may request prepayment for the entire contract period, for six months or a quarter of the contract period.
We are committed to making our cooperation with our clients as transparent as possible.
All aspects of the projects – the development as such, the invoicing, and the account management – benefit from such an approach.
Please contact us with any questions or concerns related to the financial matters of our operation, and we will be happy to provide you with all information you may need.Back to Playbook