---
title: "How do SaaS companies handle billing for professional services?"
description: "SaaS companies bill for professional services using fixed-fee, time & materials (T&M), or hybrid models. Billing is separate from recurring software subscriptions."
url: "https://ordwaylabs.com/faqs/billing-for-saas-professional-services/"
type: "Post"
publisher: "Ordway"
language: "en-US"
published: "2025-07-24T08:49:45+00:00"
updated: "2025-12-29T12:57:53+00:00"
author: "Ordway Labs"
categories:
  - "FAQs"
  - "Usage-Based Billing FAQs"
---

# How do SaaS companies handle billing for professional services?

## Short Answer

SaaS companies bill for professional services using structured methods such as fixed-fee milestones, time and materials (T&M), or blended hybrid models. Billing is typically triggered by project phases, time logs, or completion events and handled separately from [recurring software subscriptions](/resources/guides/subscription-billing-guide/).

## Trigger Logic / Key Formula

[**Professional Services Billing**](/products/billing-software/)= Scope of Work (SOW) defined → Billing method selected (Fixed Fee / T&M / Hybrid) → Milestone completion or hours tracked → Invoice issued per terms

## How It Works

While [SaaS revenue](/resources/glossary/annual-recurring-revenue-arr/) is typically subscription-based, many companies offer add-on services like implementation, training, and integration support. These are non-recurring services billed under separate terms. Here are the most common billing methods used:

* Fixed Fee: A set amount invoiced upfront or by milestone (e.g., 50% at kickoff, 50% at go-live)
* Time & Materials (T&M): Billed hourly or daily based on tracked time, often with a not-to-exceed (NTE) cap
* Hybrid: Combines fixed project phases with flexible hourly support for change orders or ongoing services

Billing events may be triggered manually (by project managers) or automatically (from time tracking systems or project milestones). Invoices typically include labor line items, service descriptions, and contract references.

## Real-World Example

A vertical SaaS platform providing both onboarding and API integration billed its implementation services using a fixed-fee milestone model. Payments were collected 40% at contract signing, 40% at sandbox deployment, and 20% at final handoff—reducing [DSO by 30%](/blog/improve-dso-saas/) over T&M contracts.

## Frequently Asked Questions

### Can SaaS and services be invoiced together?

Yes, but most billing systems keep them on separate schedules for clarity and compliance.

### What’s the most common billing trigger?

For T&M, it’s time logged. For fixed-fee, it’s milestone completion or phase delivery.

### Are PS invoices handled in the same system as subscriptions?

Not always. Some teams use ERP modules or [separate project accounting tools](/resources/white-papers/the-finance-leaders-guide-to-saas-billing-integration/).

## Related Reading

For examples of SaaS platforms automating variable billing, read our deep dive on [usage-based billing](/blog/professional-services-recurring-revenue-arr/)

Need to automate billing for both SaaS subscriptions and services? Explore Ordway’s [Recurring and Metered Billing Platforms](/products/metered-billing-software/)

## About Ordway

Ordway is an all-in-one billing and revenue automation platform for growing B2B SaaS companies, typically from post-Series A to pre-IPO. It combines [Subscription Invoicing](/products/subscription-invoicing-software/), [Recurring Billing](/products/recurring-billing-software/), [Metered Billing](/products/metered-billing-software/), [SaaS Billing](/lp/ordway-saas-billing/), [SaaS Accounting](/products/saas-accounting-software/) and [AI-Powered Revenue Management](/products/ai-powered-revenue-management/) to automate complex pricing models, streamline revenue recognition and accelerate the financial close.