Getting

Paid

Best practices for billing and collection

estimated construction cost, and the payment for each stage corresponds to
a percentage of the total fee.
t is not unusual for architects to have unpaid invoices
sitting around months after the due date. Aging invoices are
bad for the business because the likelihood of them being
paid decreases the longer they age. Many architects are bad
at collections for various reasons,most of which stem from
the notion that it is in bad taste to remind clients to pay. They
neglect the paperwork especially when the amount is small;
they don't have a

billing and collection system in place; or if they have one,they don't

A good billing and collection system ensures the steady cash flow
needed to cover salariesand ongoing expenses. Our firm,BUDJI+ROYAL
Architecture + Design, bills the client after we've completed specific
milestones of the project, namely,the contract proposal, schematic
design, design development,construction documentation, and turnover
stages. The total professional fee we charge is a percentage of the

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 the client for a down payment, a percentage of our professional fee. We bill
Contract proposal a separate down payment for bespoke furniture for the project, a service
we provide in keeping with our philosophy of being a "total design" firm. In
our contracts, the payment due date is ten days after receipt of the billing
From the very first meeting with the client,we agree on the scope statement.
of work, project schedule, fees, and payment terms and conditions.
We then proceed with an in-depth interview to ascertain the
After the meeting, we draft a contract proposal. Creating a
requirements of the project, and prepare a "wish list"-a checklist of things
comprehensive and detailed contract that clearly spells out the
the client wants included in the project. For a residential project, for
obligations of both parties eliminates misunderstandings and
example, the list asks for the preferred number of rooms and bathrooms, or
disagreements. Upon signing the contract, our finance department bills
the type of walk-in closets.

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Schematic design stage

produces the schematic design studies for the project,consisting of initial estimated
construction cost is prepared as well. Tips for effective
Refinements to the studies are made based on the feedback. Once the studies are payment collections
approved and signed,our finance department sends the second billing statement to the
client.
Examine your processes.

Design development stage Do you set a standard due date for each payment? Does the format of
questions?
The schematic design studies are fleshed out after approval. The team the materials
and the sanitary,electrical and mechanical systems to be [Link] design development receipt of the billing statement. We send soft and hard copies of
plans are presented to the client,and once approved and signed,we send the third billing the through either a transmittal form or email response
statement.
Hold weekly financial meetings.
Contract documentation
Set weekly meetings with finance staff to discuss billing and
The technical team drafts construction drawings,detailing the work for the collection possible improvements to existing procedures. Our finance
architectural,structural,electrical and other engineering [Link] stage yields a staff updates our ManCom meeting every Monday.
compilation of plans that make up the "bible" of the project-the general conditions for the
construction of the project,specifications for the materials'type and quality,and their Make your terms of payment clear from the [Link] and the
manner of construction. billing schedule Add a clause in the contract stating that late payment
will incur additional charges.
The finished drawings are handed over to the client and project manager for bidding.
The fourth billing statement is sent [Link] to the approved
drawings,whether major or minor,incur change order fees based on the man-hours
needed for the new scope of work. Assign someone to follow-up unpaid [Link] to remind
them promptly. We assigned our Administration Manager clients
Our standard procedure is to call a client three days before the
due date, then remind them again a day before.
Turnover to firm
The project is turned over to the contractors and project managers for the execution
of the construction [Link] do periodic site visits to monitor the general Keep communication open.
progress,address site issues,and check whether the design is [Link]
of items that need correction is done [Link] construction is completed,the Update the client on the project's progress regularly This way,
contractor and project manager turn over the project to [Link] we are a total design they are apprised of developments and made aware that a milestone
firm,we also create custom furniture and accessories for the [Link] addition to designing has been achieved, and a billing statement will be on its way
and overseeing the production othe pieces,the interiors team styles the spaces.

When our obligations are finished,we turn over the project to the client,and send the
final billing statement that covers the finishing stages and other reimbusables,if any.A
separate billing statement for the custom furniture and accessories is sent as well,once
they are delivered to and accepted by the client.

The Authors

Budji Layug and Royal Pineda

established BUDJI+ROYAL
Architecture+Design in [Link] firm espouses a total approach to [Link]
landscaping services, as well as the creation of bespoke furniture and home accessories
The firm's practice extends beyond the Philippines to France,Israel,India and [Link]
is chairman and principal [Link] Pineda serves as president and principal architect