Software projects are usually paid for in one of two ways. Choosing the right one for your situation prevents most arguments about money later.
Fixed price
You agree a scope and a price up front. It suits projects where the requirements are clear and unlikely to change. The risk is that anything outside the written scope costs extra, so the scope needs to be precise.
Time and materials
You pay for the time spent. It suits projects where you expect to learn and adjust as you go. The risk is that costs drift, so it needs a budget cap and regular reports of what was done.
A practical middle way
Many projects work best in phases.
- A small fixed price discovery phase to write the scope
- Fixed price phases for the parts that are clear
- A monthly allowance for changes and improvements