What is a fixed fee?

A fixed fee or a flat fee is a fee for goods or services that are set at the beginning of the transaction and do not change. The fee can be set regardless of the use for a certain period of time or until a certain threshold is achieved. When used in contracts between the parties, it concerns a flat fee for the prescribed scope of services that do not increase regardless of how long it takes work or any other expenses to work. A fixed fee or expenditure is the opposite of the cost of variable fees. These two categories are usually maintained separate in the accounting statement or budget, because fixed fees are known in advance, remain the same each month and can be extrapolated with certainty into the future. The cost of the fee variable varies depending on how much of the good or service is used. If a person or a matter of time wants to reduce expenditures, the category of variables would be paid to the greatest attention because the use can be reduced and immediately reduced costs.

Rent in the apartment is an expenditure on a fixed fee. The cost of rent usually remains the same, a month after a month. Electricity is usually the cost of a variable fee. Most people are charged based on how much it is used every month. When adding electricity costs to the budget, costs can be estimated, but are certainly not known in advance.

fixed fee costs are not bound to use, but is usually tied to a long time or threshold. The Internet service provider can charge one flat -rate internet access fee per month, no matter how much bandwidth it is used. However, mobile phone providers can charge a fixed rate for any amount of minutes used up to a certain level per month.

The distinguishing aspect and final costs for the XED fee is the ability to know what the fee will be. In terms of contractual point of view, the flat fee for the service knew in advance how muchwill be paid for their services. This amount will not change, so it is the supplier's responsibility to perform work within the contractual budget to make a profit. Fixed fees are the most difficult type of expenditure to reduce or change the budget, as the security of a flat fee is often offered in exchange for a guarantee for this rate for a long time.