You are charged for hourly rate, direct expenses involved and material purchased.
Time & Material model is particularly useful in contexts where the project is complex and the requirements are not clear up front. Or, if your project is a innovative vision that nobody ever did before and it is impossible to describe it and specify at the very beginning. Inherent flexibility of this model will make you manage the change easily, when willing to implement new technology or new ideas. You can be also involved in process development, give your feedback which is immediately included. However, you may concern if your developer has reduced incentive to work. Don't worry - there are adequate resources tracking system to ensure he doesn't waste your money. The developer may even give you regular estimations on his amount of labour and follow them by reports after the period has ended. It will make you feel taking over the process and the supplier is motivated to go beyond the expectations.
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