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Billing Practices for Designers

September 24, 2009

This site has been created primarily to offer designers ideas from other designers on how to build their businesses, especially in rough economic times.

Billing-  Here are two thoughts on billing.

Transparent Billing

Transparency is a much overused word in business jargon. However in billing practices completely transparent billing is now required. Gone are the days when designers could “double the price” of the products they specified, or in effect become a retailer. The internet has changed that. Clients want to see invoices, know what things cost, and know what they are paying for what they are buying. Designers who still hang on to this “retail” practice run the risk of only being able to sell lower and lower end products (because of the mark-up), or losing clients who are increasingly suspicious of this billing practice.

What I hear over and over around the country is that successful designers now offer a mix- design fee plus flat % of goods purchased, with invoices passed through at true cost. This allows for confident clients and prosperous designers if done right. Maybe your rightful fee of $ xxx up front for initial concept and drawings plus your rate of $XXX per hour (staff at $yyy per hour), plus a 25% flat admin. fee on the total of all goods purchased and all services rendered apart from your primary business (this is to pay for all that we suppliers put you through)? You do the math, but this is the way forward it seems. Also, clients are free to spend more on things they like, which allows you to design with better components, thus giving you the designer a chance to really give the clients your very best.

The days of designers doubling the price of everything really are ending. Whether it is in discussions I have had recently as I visited designers in over 20 cities, or at a panel discussion I recently participated in in New York, it is clear that designers who charge retail prices other than as a pre-agreed service fee are asking for trouble with their clients.

The good news is that, once you have negotiated an open fee structure that is agreed with your client, much of the possible tension and mistrust in the client/designer relationship is gone!

Bill Twice per Month

A second thought for you regarding billing is to bill twice per month not once per month, if that can be done. Simply put your bills are smaller and your cash flow is better. This may not be practical for everyone, but it can really help.

One Comment leave one →
  1. November 6, 2009 6:44 pm

    working on a cost plus 20% basis, should the client be required to pay the full 20% on total invoice amount, even when designer graciously only asks for i/2 deposit for cost of goods???
    example:
    total rug invoice 25,000
    total designer 20% 5,000
    client is billed for 12,600 plus 5,ooo equals 17,600
    balance due upon shipment of rug is 12,600…4 months later
    Why should I have to wait for my commission when my work and time has been done pertaining to that rug????

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