The other system is called a FP (fixed price) project. You decide up front how much you believe the result of your work is worth to the customer. Then based upon this value realized for the customer you negotiate a price and terms for the service to be performed.

Many, oh so many, have been burned on FP jobs. You "think" that the customer has told you what he wants and make that. When the customer sees it he says "that is not what I want" and because of weak language (or - worse - none) in the agreement you just have to completely reso the job for free. In my early days I did this stupid trick and, when all was finished, if calculated that I had made $0.83 per hour.

If you are to take a FP job, do so only if you get a contract the states exactly and in excruciating detail what you are to deliver and states that beyond that you are to be paid $xx.xx per hour.

Erik