Agreed Peter!
Since 1999 our firm works via:
Hourly Services - For Pre-Design Meetings + Investigation & Sketches
Advanced Retainer - 20 % Schematic Design Fee
Advanced Retainer - 20 % Design Development Fee
Advanced Retainer - 60 % Construction Document Fee
Hourly Services - Construction Admin. + CalGreen Coordination
Hourly Services - Additional Services + Post Construction Services
...And we bill Hourly Services weekly or monthly depending on the
client and their responsiveness, etc...
We've also been known to receive retainers for Hourly Services via
agreed to "Allowances"...
After the Dot-Com Crash in 1999 - e decided that WE as Architects
are NOT the "Bank". Period!
And by working via "Retainers", it acts like a "Respectful Threshold"
that dishonest clients will not cross... Because they never really intended
to pay in full anyways!
Do you have fewer clients. Yes. Blissfully and Wonderfully Fewer...
Non-Paying Clients!
Also for projects of an appropriate size, we print one invoice with
checkboxes on each line items ie: SD; DD; CD; CA, etc... With the
correct percentages shown... so we literally resubmit the initial invoice
4-5 times - Checking off each successive line item.
My suggestion? IF the client is a good human, but they want you to
"play the bank", have your Legal + CPA Team meet with every party,
and determine what % of ownership they are willing to share with YOU!
And remember, since you're taking a greater risk up front, I'd suggest at
least a 1.5x - 2x or more value to be given for Your Risk! ;-)
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David Phillips AIA
Principal
DLP Associates - Architecture + Planning + Interior Architecture & Design
Sanger CA
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Original Message:
Sent: 12-22-2019 14:09
From: Peter Macrae
Subject: Non-paying client
Pretty easy RA,
We are in the same market as are you...we require by contract (and receive without augment) 50% of our fee through completion of the CD Phase as a project deposit at contract signing prior to commencing any work on the project...and then payment of the balance, 100% of the fee through the CD Phase, before we release the sign-seal permit documents (again without objection...after all, it is the only thing they must have).
We then only perform services during the Construction Phase at our hourly rates.
This policy that we have had in place now for going on 9 years now, has really helped with the cash flow.
I highly recommend that you consider the same.
Happy Hunting !!!
Peter
Macrae ARCHitecture, LLC
Peter S. Macrae, AIA
Principal
"MARCHing with a different perspective"
74 Orchard Drive
Worthington, OH 43085
614-205-6805 phone
Original Message------
I would like the community at large to comment on how you handle non-paying clients. We have found ourselves in a niche of restaurant and retail projects for a little over 15 years now. And while we have always dealt with slow-paying clients, we have a new client that after 90 days has simply said I am not going to pay you. How do you handle situations like this?
Background: This new client recently purchased a restaurant group we have worked with for 15+ years.
I have written both property owners notifying them that our client, their tenant, has not and is now declining to pay and that we would be proceeding with liens on their properties.
In advance, thanks for sharing your insights.
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R. Coco AIA
Architect
Coco & Coco
Midland TX
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