Fee Distribution over Project Phases discusses how much your architect charges and when.
First: no two architects bill for their services in exactly the same manner or time schedule. So what one does, does not mean any other will invoice according to the same procedures. That being said, let’s look at some practices that a client might reasonably encounter when engaging and working with an architect.
INITIAL PAYMENT
It is widely becoming the accepted practice for an architect to require an “initial payment” to begin the work of the project. In the past, this might have been previously deemed a “deposit”, and while it has some similar characteristics, nowadays, this initial payment is not refundable and is not applied like a retainer. A retainer is used by some attorneys in the beginning of legal representation, and when those funds are exhausted (usually on an hourly basis), another retainer is requested. An initial payment, however, does not function exactly in the same manner. Because it is quite easy for architectural fees to be accumulated quickly, especially during intense periods of service, architects these days may have the Initial Payment instead be maintained “on account”, staying there until the last payment of the project, or applied among the last several payments. In this manner, the architect can be assured that they will at least have that amount of fee being held in reserve, in case the client defaults on a subsequent payment request (invoice). Therefore, the client will be required to pay for invoices starting from the beginning of the project, as they are presented to the client by the architect, without the initial payment being factored into the amount owed, until the end of the project. Usually architects that have more experience utilize this method, as a function of trial and error in their practices.
INVOICING FOR BASIC SERVICES
Basic Services can be seen here: Basic Services. Basic Services for architectural projects generally are composed of Programming (P), Schematic Design (SD), Design Development (DD) and Construction Documents (CDs). While each firm can vary, lumpsum fees might be distributed in roughly these percentages of the total Basic Services fee:
P 5%
SD 25%
DD 30%
CD 40%
Some firms might have slightly more or less in each of these phases. However, many firms these days simply charge hourly. This is fast becoming the main accepted practice, as this is the fairest of architectural billing practices. Why: clients only pay for the time they use. The architect also is paid for what she or he does: no more; no less. In the past, when architects were paid according to a fixed fee, this meant that either they made a windfall, receiving additional compensation for work they did not perform, or not being paid enough. In either event, the architect was being rewarded for doing a skimpy job, which did not serve the client well. By paying the architect hourly, the architect does precisely the amount of work required to create a proper design and proper documentation for that design. Even being paid in an hourly manner, it might generally be construed to believe that the rough percentages of the total fee paid might be in the ranges of the amounts shown in the above list, keeping in mind that every project is different.
The Basic Service invoices will likely be billed on a monthly basis, although it is common for some architects to invoice every couple of weeks, when a great deal of work is being accomplished, such as during CDs. Also, it is common for architects to invoice for their work as they complete each of the various phases of work, and/or when they submit their work to their client for review. Indeed, more often than not, when a client receives work; they also receive an invoice for that work.
INVOICING FOR ADDITIONAL SERVICES
Additional Services can be seen here: Additional Services (scroll down on the page).
Additional Services are often hourly and include such work items as Record Drawings, Electrical Schematics (in the case of residential architecture), Cabinetry Elevations/Design, Bidding-Negotiating-Price Discussions, Construction Administration, Project Management, 3D Imagery, interior design and other certain services not contained within Basic Services. Invoicing for these items may appear when they are completed, or in several chunks, if the amount of work is substantial and doesn’t conveniently allow completion within the architect’s desired billing period.