14.6. Create MSP Client Contracts with Fixed Fee, Hourly, Usage, and Bucket Billing

Client contracts define what your MSP sells to a specific client, how often it should be billed, and which services belong on each invoice. Use them for managed service agreements, backup plans, security bundles, block-of-hours support, project retainers, and any other recurring or usage-based work that needs to roll onto an invoice on a predictable cadence.

This guide walks through the full Contract Wizard, the Contract Detail page, contract statuses, row-level actions, drafts and templates, and the rules that govern how multiple contracts on the same client combine onto a single invoice.

Before you start

Confirm the following before opening the wizard:

• The client already exists and has a billing contact, billing address, and payment terms.
• The client has a billing cycle configured (see 14.5. Client Billing Settings).
• The client's billing settings — currency, tax region, and any overrides — are correct (see 14.5. Client Billing Settings).
• If the agreement uses fixed-fee or hourly services, the underlying services exist in your service catalog and your tenant-level billing defaults are sensible (see 14.2. Tenant Billing Settings).
• If you plan to bill taxable services, confirm the client's tax settings before generating the first invoice.

Recommended MSP naming pattern

Use names that make sense to both technicians and accounting staff. Clear, business-friendly names make invoice review much easier when a client carries several active agreements at once.

• Managed IT Complete - 35 Seats
• Managed Backup & Security Agreement
• Block of Hours - 20 Hour Support Bank
• Microsoft 365 Licensing and Backup
• Co-Managed Help Desk Retainer

The contract name appears on the Client Contracts list, on the Contract Detail page, and on generated invoices, so pick a name your sales, service, and billing teams will all recognize.

Understanding contracts

A contract answers:

• Which recurring fees does this client have?
• Which services are included?
• Which services bill hourly?
• Which services bill by usage?
• Are there special rates, included quantities, or bucket allowances?

A client can have more than one active contract — for example, Managed IT Complete - 35 Seats for core managed services alongside a Block of Hours - 20 Hour Support Bank for ad-hoc project work.

Viewing contracts

Navigate to Billing > Contracts > Client Contracts. The page has two sub-tabs:

Within the Contracts list you can search by client or contract name. Status badges on a client contract row are derived from the assignment dates and active flag, and resolve to one of: Draft, Active, Terminated, or Expired. (The Published and Archived badges are reserved for the underlying contract templates on the Templates sub-tab — they never appear on a client contract row.) Draft contracts that have not been completed have a Resume option in their Actions menu.

Figure 1: Client contracts show which customer owns the agreement, the contract name, billing frequency, start date, and status.

Creating a new contract

Two entry points are available from the Client Contracts page:

• Create Contract: Opens the full Contract Wizard — recommended for all new contracts.
• Quick Add: Opens a simplified dialog for very basic contracts where you don't need fixed-fee, hourly, or usage detail up front.

Contract Wizard — step by step

The wizard has six steps. Steps 2 through 5 are optional — skip the ones that don't apply to the agreement.

Step 1 — Contract Basics

• Start From Template (optional): Pre-fill the wizard from a saved template (for example, a reusable Managed IT Complete - 35 Seats template).
• Client (required): The client this contract covers, such as GreenLeaf Dental Group.
• Contract Name (required): A descriptive name (e.g., Managed Backup & Security Agreement or Acme Corp - Managed Services 2026).
• Description (optional): Internal notes about the agreement that your billing team will recognize.
• Billing Frequency (required): Weekly, monthly, quarterly, or annually. Most MSP recurring agreements are Monthly.
• Recurring Cadence Default: Controls how recurring billing periods are anchored.
  • Invoice on client billing schedule: Aligns with the client's billing cycle.
  • Invoice on contract anniversary: Follows the contract's own start date.
• Currency (required): Defaults to the client's preferred currency.
• Start Date (required): Determines when service periods can begin.
• End Date (optional): Leave blank for an evergreen contract; set for a fixed-term contract or a one-year service agreement.

Renewal Settings — the section heading changes based on whether an end date is set, but the same fields appear in both cases:

• Fixed-term (end date set): The section is titled Renewal Settings.
• Evergreen (no end date): The section is titled Evergreen Review Settings.

In both cases the same controls apply:

• Use Tenant Renewal Defaults (toggle): When on, the contract inherits the tenant defaults configured in Settings > Billing > General > Renewal Automation. When off, the values you enter below override the tenant defaults.
• Renewal Mode: No Renewal, Manual Renewal, or Auto Renew.
• Notice Period (Days): Hidden when Renewal Mode is No Renewal; visible otherwise.
• Renewal Term (Months): Hidden unless Renewal Mode is Auto Renew.

See 14.9. Contract Renewals for how the renewal queue surfaces these contracts.

Purchase Order section:

• Toggle Require Purchase Order for invoicing on to require a PO before invoices can be generated.
• When the toggle is off, the PO fields are not shown at all.
• When the toggle is on:
  • PO Number appears and is required.
  • PO Amount appears and is optional.

Use this when a customer requires a PO number or PO budget before invoices can be approved.

Step 2 — Fixed Fee Services (optional)

Add services that bill as a flat recurring fee — for example, the seat-based managed services on Managed IT Complete - 35 Seats, or the bundled tooling on Managed Backup & Security Agreement.

• Set the Recurring Base Rate for the line.
• Add services from the catalog and set Quantity for each.
• Set Billing Timing: Advance (invoice at period start) or Arrears (invoice after period end).
• Enable Proration if partial periods should be prorated.

Step 3 — Products (optional)

Add product catalog items to the contract. Set the Quantity for each product. Use this for license counts and similar resold items, such as the seats on Microsoft 365 Licensing and Backup.

Step 4 — Hourly Services (optional)

Add services that bill based on time entries — for example, after-hours rates on a Co-Managed Help Desk Retainer.

• Set the Hourly Rate, Minimum Billable Time, and Round Up To Nearest increment.
• Optionally enable a Bucket Overlay per service for included-hours allowances. This is how a Block of Hours - 20 Hour Support Bank is configured: the bucket overlay defines the included hours and the overage rate that kicks in beyond them.

Step 5 — Usage-Based Services (optional)

Add services that bill based on measured quantities — backup gigabytes, monitored endpoints, mailboxes protected, and so on.

• Configure Tiered Pricing if rates change at different volume levels.
• Optionally enable a Bucket Overlay per service for included-unit allowances with overage billing.

Step 6 — Review & Create

Review all contract details, services, and billing configurations, then click Create Contract.

See 14.7. Contract Lines, Presets, and Examples for a deeper look at how individual contract lines are structured, including end-to-end examples of common agreement shapes.

Viewing and editing a contract

Click any contract row to open the Contract Detail page. The detail page has five tabs:

Service period behavior on the lines is covered in 14.11. Understanding Service Periods, and how those lines actually become invoices is covered in 14.12. Generating Invoices.

System-managed default contracts

A system-managed default contract is auto-created for a client to capture work that isn't covered by any user-authored contract. It exists for attribution only — it does not drive recurring billing on its own. When you open one, the Contract Detail page presents it in a locked state:

• A blue info banner appears at the top reading "System-managed default contract — Created automatically for uncontracted work. This contract is attribution-only and does not control recurring billing behavior. To configure custom billing behavior, create or edit a normal user-authored contract."
• The Contract Lines and Pricing Schedules tabs are disabled. Overview, Documents, and Invoices remain available as read-only views.
• On the Overview tab, the Status dropdown, Billing Frequency dropdown, Manage Pricing Schedules button, and Save Changes button are all disabled.
• The Delete button is hidden entirely (not just disabled).
• In the Client Contracts list, the row's Actions menu shows only View details — no status transitions and no Delete.

If you need custom billing behavior for that client, create or edit a normal user-authored contract instead.

Contract statuses

Contract row actions

The Actions menu on a client contract row varies by status:

The first item navigates to the Contract Detail page (or, for drafts, reopens the wizard mid-stream). The transition action (Set to Active / Terminate / Restore) is only present for the status it applies to. Delete permanently removes the contract.

Drafts sub-tab row actions

The Drafts sub-tab (under Billing > Contracts) lists contracts saved mid-wizard. Its row menu has just two items:

• Resume: Reopen the wizard at the saved step.
• Discard (red): Permanently remove the draft.

Templates sub-tab row actions

The Templates sub-tab row menu has two items regardless of template status (Published / Draft / Archived):

• Edit: Open the template in the Contract Wizard.
• Delete (red): Remove the template.

Using contract templates

Navigate to Billing > Contracts > Contract Templates to create reusable templates — for example a master Managed IT Complete - 35 Seats template you clone for each new managed services client. Templates use the same wizard as regular contracts and can be applied when creating a new contract (Step 1: Start From Template).

Templates are reusable definitions; client contracts are client-owned instances created from them.

Multiple contracts for the same client

A client can have multiple active contracts — a common MSP pattern is one Managed IT Complete - 35 Seats for core managed services plus a Block of Hours - 20 Hour Support Bank for project work, and possibly a Microsoft 365 Licensing and Backup for resold licenses.

Items from different contracts combine onto a single invoice when their invoice windows align and their billing constraints are compatible — same currency, same PO scope (or both POs disabled), and the same tax treatment. When any of those constraints differ, the items are split across separate invoices.

Related topics

• 14.5. Client Billing Settings
• 14.7. Contract Lines, Presets, and Examples
• 14.8. Pricing Schedules
• 14.9. Contract Renewals
• 14.11. Understanding Service Periods
• 14.12. Generating Invoices
• 14.2. Tenant Billing Settings