Methods of settlement with software house

A software house is in other words an IT company, in which employees have deep and advanced knowledge in technology. They use this knowledge to create dedicated software, web designs, web applications, mobile applications or online stores with a wide spectrum of functionalities.

The choice of a good software house, which will provide services for our business, is not that easy. There are plenty of companies and individuals with similar offers. First of all, you have to remember that a professional software house not only will prepare and implement your project, but also will guide you through the whole process of creation. In other words from the very beginning, you should have an impact on each decision concerning your project and after its completion you should be trained to learn about your website, online store or application and see how to change basic content and not be totally dependent on technicians, who create your project. Another important aspect which you definitely should consider while choosing a software house is a methodology of collaboration and type of financial settlement.

One of the financial settlements with software houses is called Fixed Price and includes determining in advance the budget that we want to commit to the whole cooperation. All of the costs are accurately scrutinised and estimated on the basis of information provided by the customer, yet before the beginning of work. Thanks to that cost and delivery time are transparent and the customer won’t be surprised with any additional costs.

This solution will not work in case of projects, which demand a flexible approach. There are situations, in which thorough estimation is impossible, for instance because of many conceptual changes. According to this Fixed Price model is suggested for small and medium realisations, which have concretely specified priorities. The model is also recommended for people, who don’t have time or ability to control the project and prefer to rely on a chosen software house.

In contrast to the former model of work, here we put emphasis on what has already been done, not on what is planned within the fulfilment of a project. Therefore, the customer pays for work which has actually been done by the software house team.

Time & Materials model is assumed as quite cheaper, because the programmers don’t have to add an assurance sum, which would cover potential obstacles. The planning of the project is also easier, because you only have to specify initial steps, which will be updated on an ongoing basis. This is why the model is recommended to such people, who don’t have clarified vision of the whole project yet, but just some scope of functions which the project should have. This model is also praised because of the fact that we pay for actual input of labour in our project.

On the other hand if we want to investigate the work of programmers, we need to devote some time and have at least rudimentary technical knowledge to verify the real status of the project. We also have to trust our contractors, who are responsible for reliable division of work and the quality of final effect.

In practice the mixed model is often applied. In other words, at the beginning of cooperation with a software house, the client enters into a contract on the clarified price, according to the Fixed Price model. When the principal acquaints with software house work specification and decides on further collaboration, the estimate is usually based on the number of hours devoted to the completion of the project.

If you want to learn more about methodology of work and way of financial settlement with our software house, we invite you to contact us. Thanks to flexible offers we will undoubtedly match the model of partnership to all of your needs and expectations.