Your fees are fine. The problem is that you are lending money to your clients, several thousand pounds at a time, at zero per cent, on terms you never agreed to. That is what a project-staged fee structure does if you leave it alone. The work is profitable — the spreadsheet says so, your accountant says so, the year-end accounts say so — and yet you are paying yourself three weeks late and covering the VAT bill out of a deposit that belongs to a job you haven't started.
Profit is a statement about a finished project. Cash is a statement about a Tuesday. Nobody pays the rent in profit.
The fix is not repricing. If you have already done the work of pricing properly — and if you haven't, do that first — then repricing will not help, because the money is right and the calendar is wrong. What follows is how to move the calendar.
Take a straightforward house project. Your costs — which for a sole practitioner or a two-person studio means salaries, mostly yours — accrue in a near-straight line from the day you open the file. Every week you work, you spend roughly the same amount. That's your spend curve. Boring, steady, relentless.
Now draw your invoicing curve on the same axes. It isn't a curve at all. It's a staircase with long flat treads: nothing, nothing, nothing, a step at the end of concept design, nothing, nothing, nothing, a step when planning comes back.
The gap between those two lines is your overdraft.
Where it opens widest is predictable. Say you've agreed a fee across RIBA stages and you invoice at the end of Stage 3 — but your appointment, or your habit, ties that invoice to planning approval rather than to submission. A householder application runs to an eight-week determination period as standard, and that's assuming no validation queries, no extension of time, no case officer on annual leave. Add your 30-day payment terms on top and a fortnight of the client thinking about it. You have just funded three months of your own salary, out of your own pocket, on a project that is going perfectly well.
Do that on two projects at once and you have a genuine crisis on a business that is, on paper, doing fine.
Never Invoice on Sign-Off
This is the single highest-value change in the whole article, so I'll be blunt about it: invoice on completion of your work, never on approval of it.
Sign-off is not in your control. Planning determination is not in your control. A client's decision to sit on the concept pack for five weeks because their sister is coming to stay is not in your control. You did the work; the work is the thing you sold.
Write the appointment so the fee for a stage becomes due when you issue the deliverables for that stage. Not when the client says they like them. Not when the local authority decides. If the client wants revisions, that's either included in the stage or it's a variation — either way, it doesn't move the payment date. In practice this one clause is worth more to a small studio than a five per cent fee uplift, because a five per cent uplift arrives three months late and this arrives now.
Take the Deposit Before You Draw a Line
No deposit, no file opened. Not a soft rule, not "usually", not "unless they seem nice".
A deposit does three things at once. It funds the front of the spend curve, which is the part nobody else is funding. It filters out the clients who were never going to pay — the correlation between reluctance to pay a deposit and reluctance to pay anything ever is, in my experience, close to one. And it changes the psychology of the relationship: a client who has paid money has started a project, and a client who has paid nothing has started a conversation.
What we've found works is enough to cover the early work before your first stage invoice can realistically land, held against the final invoice rather than the first. That way it isn't a discount, it's a buffer that sits in your account for the whole job.
Long Stages Get Monthly Invoices
Some stages are short. Some stages — technical design on a house, or a construction stage that runs across a year — are long enough to swallow a small practice whole if you wait for the end of them.
So don't. Split any stage longer than about six weeks into monthly interim invoices against percentage completion, stated in the appointment up front so it isn't a surprise. "Stage 4 fee invoiced monthly in arrears against progress" is a normal, professional, entirely unremarkable line in an appointment. Contractors have been doing this since forever. Architects, for reasons I've never understood, treat monthly billing as somehow grubby.
It isn't grubby. It's the difference between one invoice for a big number that the client flinches at and pays late, and three invoices for reasonable numbers that go through without comment.
Fourteen Days, and Say What Happens on Day Fifteen
Thirty-day terms are a convention, not a law. Set 14 days. Clients pay on the date you tell them to pay, roughly, and shortening the stated term shortens the actual average.
Then state the consequence on the invoice itself. For business-to-business work, the Late Payment of Commercial Debts (Interest) Act 1998 gives you statutory interest at eight per cent above the Bank of England base rate, plus a fixed compensation sum of £40, £70 or £100 depending on the size of the debt. You rarely have to charge it. You do have to print it, because an invoice footer that names an Act reads very differently from one that says "payment appreciated within 30 days".
The catch worth knowing: that Act covers commercial debts. A homeowner client is a consumer, not a business, so on most house projects the statutory route isn't available to you and your right to interest is whatever your appointment says it is. Which means: check that your appointment says something. Plenty of bespoke letters of appointment, particularly the friendly two-page ones small practices write for domestic clients, contain no interest provision at all.
The Money in Your Account That Isn't Yours
Here is why the deposit keeps disappearing.
VAT is not your money and never was, but it sits in the same account looking exactly like your money. Worse, the tax point is generally the invoice date, not the payment date — so HMRC wants VAT on invoices you have raised and not yet been paid for. You can owe VAT on a fee that is still sitting in a client's accounts payable pile. If your turnover is anywhere near a normal small studio's, HMRC's cash accounting scheme is worth a conversation with your accountant, because it moves your VAT liability to when the client actually pays rather than when you invoice. That single change fixes a specific, recurring, entirely avoidable pinch.
Then there are the lumpy annual outflows that have nothing to do with any project's profitability and everything to do with your bank balance on a particular week. PII renewal — and ARB requires you to carry adequate and appropriate cover, so this is not optional. Your CAD and BIM subscriptions, which love to renew in a cluster. CPD. Chartered practice fees if you carry them. These land on known dates every year. Put them in a calendar now, and put a twelfth of the total aside every month, so that renewal week is an event that happens to your savings pot rather than to your overdraft.
Other People's Fees Are Not Your Cash Flow Problem
If you appoint the structural engineer through your contract and pass the cost on, you are now a bank for the engineer as well as for the client. You pay them on their terms and recover on yours, and the two rarely line up.
Where the client is willing, have them appoint consultants directly. Where they're not, don't pay a sub-consultant's invoice until the corresponding client invoice has cleared, and say so in the sub-consultant's appointment so nobody is surprised. Same principle for disbursements — printing, travel, planning fees, surveys. Bill them in advance where you can, monthly where you can't, and never let them accumulate into a single heroic reimbursement request at the end of a stage.
The Rolling Three-Month Forecast
Everything above controls the inflows. This tells you whether it's working.
Thirteen weeks, one column per week. Opening balance at the top. Then cash in, listed invoice by invoice by name, dated on the day you honestly expect payment to land — not your terms, their behaviour. If that client always pays at six weeks, put it at six weeks. Lying to a forecast is a self-harm activity.
Then cash out, week by week: salaries including your own, rent, software, the PII instalment, the VAT payment, corporation tax if it falls in the window, consultants. Closing balance at the bottom, carried into next week's opening.
Update it every Monday morning. It takes ten minutes once it exists.
The number that matters is not the closing balance at week thirteen. It is the lowest point anywhere in the thirteen weeks. That trough is your real financial position, and it's usually two or three weeks before a big stage invoice clears.
Can You Afford to Hire?
The forecast answers this, and it answers it harshly.
Add the new salary plus employer National Insurance plus their share of software and desk cost into the outflow rows, every week, from their start date. Then delete any project income you haven't actually won — no pipeline, no maybes, no "the extension enquiry from March will probably convert". Run it again.
If the trough stays above zero, you can hire. If it doesn't, you can't, and no amount of optimism about the pipeline changes that, because a Part 2 assistant's salary arrives every month whether or not the planning officer has come back to you. This is the cash-flow risk that is peculiar to architecture: fixed monthly people costs against income that arrives in lumps, months apart, on dates set by other people.
Get the deposit, invoice on completion, bill long stages monthly, print the interest terms, and keep the thirteen weeks in front of you. Do that and your bank balance stops being a mystery and starts being a consequence — one you set the shape of, months in advance, in a document nobody but you will ever read.
