Regular invoicing for architects

This article needs more work. To help develop this article, click 'Edit this article' above.

Invoicing and collecting payments is a key element in the architect-client relationship, but one which is often overlooked or avoided, particularly by small firms serving private residential clients. Architects can feel embarrassed to be asking for money from their clients, and are often poor at managing scope creep or recognising when items should be billed as additional services.

Architects have even been known to hold off on invoicing until the client is completely committed to the project and then send an unexpectedly large invoice, which can damage the relationship with the client.

There are many different ways architects charge for their professional services, such as:

• Time charges.
• A percentage of the construction cost.
• Stage payments.
• A lump sum.
• Some combination of these.

However, there are often complications and misunderstandings, particularly in relation to the clear definition of what is and is not included in the fee. It is very important therefore that this is set out clearly in the appointment agreement, along with the invoicing period and the terms for payment and that communication about billing and payments is clear and open.

RIBA Guidance Note 4 in support of the RIBA Code of Professional Conduct states that ‘ When invited to quote for architectural or other services, members should ensure that they have sufficient information about the commission for the calculation of their fee. Any fee quotation should clearly indicate the type and extent of the services (a defined scope of works) to be undertaken for that fee, and will also enable any subsequent changes to be identified. Members should ensure that they have adequate and appropriate financial and technical resources and professional expertise to deliver the services offered.’

Billing should be treated as one of the fundamental business practices of small and large firms alike, rather than as an afterthought. Invoicing can be very time consuming, particularly when a practice has a large number of clients or projects. However, it is important that it is carried out regularly to ensure that payments are due in small, regular amounts that the client will have the cash flow to pay and that keeps the cash flowing through the practice. It can also be useful to seek confirmation that invoices have been received.

The invoicing process can be automated or outsourced if this is not the strength of the practice. Automated systems can assist with:

• Compiling timesheets and expenses.
• Assessing progress against the budget.
• Resource allocation.
• Project tracking.
• Pricing for future projects.
• Tracking payments.
• Assessing the profitability of jobs, work stages, clients, staff members, business units and so on.

Late payment of invoices is a problem for most suppliers of goods and services. In tough economic times the problem gets worse as cash retention becomes a greater priority. It is frequently the largest and most powerful client groups who are the worst culprits. When considering whether to accept a new client therefore, it may be prudent to assess their financial status and their approach to payment.

Suppliers of services have a number of statutory rights as well as those provided by contract:

• The Late Payment of Commercial Debts (Interest) Act.
• The Late Payment of Commercial Debts Regulations.
• The Housing Grants, Construction and Regeneration Act.

Ultimately, the architect can suspend services, or if non-payment continues, can terminate the appointment. Debts can be recovered through court proceedings, through the small claims court for debts of less than £5,000, or by alternative dispute resolution.

See Remedies for late payment for more information.

[edit] Find out more

[edit] Related articles on Designing Buildings Wiki

• Architect.
• Architecture.
• Architects fees.
• Architectural styles.
• Architectural training.
• Appointment.
• Concept architectural design.
• Construction invoice fraud.
• Construction supply chain payment charter.
• Fees.
• Invoice.
• Professional Indemnity Insurance.
• Remedies for late payment.
• Scope of services.
• The architectural profession.