Is Changing the Fee Arrangement on a Matter Retroactive?

As far as reporting is concerned, the billable/non-billable flag is looked at when the report is run.  Whatever the Matter is set for at the time the report is run is how the time will be classified.  If you have already billed any of the time, you will need to unpost each invoice and then re-post it so the proper AR records are created.  DO NOT change the fee arrangement until you have unposted the invoices.  After unposting the invoices, change the fee arrangement to Hourly and then re-post.