The Time&Material Model: How Does It Work and When Should You Use It?

Even the best entrepreneurs can’t predict every variable affecting a project. Dynamic changes are normal for ambitious ventures. Traditional billing models, like the Fixed Price models, often simply prove inadequate: they don’t account for change, lack flexibility, and can be costly. At j‑labs, we’ve found that the Time&Material (T&M) model is a mature response to these challenges, offering flexibility, transparency, and full budget control, perfectly aligning with our partnership-driven approach. Why consider it? When is it the best choice?

What Is the Time&Material Model?

In a nutshell: Time&Material is a billing model where the client pays for actual work hours and resources used. There’s no fixed budget or predefined scope—projects are developed in phases and can evolve based on emerging needs. Sounds good? Of course. nd it’s 100% aligned with the Agile mindset driving modern projects.

How Can You Recognize the Time&Material Model?

When it comes to the main characteristics of the model, there are three key benefits that define it:

• Full Transparency – You know exactly what you’re paying your partner for because billing is based on actual hours worked. The team working on the project simply logs their time and reports progress—and that’s what you end up paying for.
• Scope Flexibility & Quick Adaptation – You can introduce changes mid-project. Change of plans? New information? Client feedback that completely reshuffles the deck? Adjust the workflow without having to renegotiate the contract.
• Ongoing Budget Control – No need to lock in the full project cost upfront. Instead, you can manage finances as efficiently as possible, based on current available data.

By the way, check out our guide on How to Effectively Plan an IT Strategy for Your Company

When Is It Worth to Operate under the T&M Model?

We believe the Time&Material Model works best when flexibility is key for the project, and the full scope of work isn’t known from the start. But, at the same time, it’s applicable whenever you’re dealing with outsourcing and fast-paced environments. 

Below, we outline some specific examples where the T&M model will simply be the optimal and smart choice.

Long-Term Projects

In extended long-term projects (like software development), it’s hard to foresee every requirement straight from the get-go. T&M lets you adjust the project to current conditions without needing all the answers upfront. It’s normal.

Working in a Dynamic Business Environment

Industries with rapidly changing user needs (think e-commerce or fintech) require a flexible approach. With the T&M model, new priorities can be implemented immediately, without contract amendments, renegotiations, or long hours spent drawing up financial details. You’re paying for the time and material, nothing more, nothing less.

You Need Full Control Over the Budget & Schedule

With the Time&Material Model, as a client, you have full visibility of the progress and budget allocation. You can set priorities in real-time while hidden fees are virtually impossible. Everything is crystal clear.

You Have a Vision But Not a Fully-Defined Final Product

If you know your goal but don’t have a concrete plan of getting there (common in projects requiring ongoing market research or continuous user feedback), the T&M model lets you start working with what you know.

You Want to Leverage IT Outsourcing

Time&Material is a perfect match for businesses outsourcing software development or other novel IT solutions. It allows for seamless team and scope adjustments as needed.

Why Choose the Time&Material Model with j‑labs?

At j‑labs, we understand that partnership and flexibility are key to IT project success. Thanks to the Time&Material model, we provide our clients with full control, transparency and the ability to operate at 100% efficiency. We’re ready to talk about your business—working with us isn’t bound by rigid rules. Let’s find the best solution together. Contact us today and find out for yourself. All you need to do is fill out the contact form. See you soon!