One of the best ways you can make money at interior design is to get paid on time, yet there seems to be an epidemic of late payment.
This is especially for designers still doing hourly work.
Why? Because 1) you usually don’t track all of your time and 2) you may reduce the final total once you do get around to creating an invoice and sending it out.
But this domino effect continues since by the time the client gets the invoice and finally sends you a check, it’s often about 60 days after you’ve done all the work.
That kind of time lag in business isn’t sustainable and explains why your cash flow isn’t good.
Fee-based designers are not excluded from this late-payment epidemic.
IDBA students and I were just talking about this topic, specifically related to progress payments.
For example, if a project needs $30,000 to get all the specifications for a big property written, then it’s going to come in chunks (aka progress payments).
The chunks are generally attached to actually completing certain portions of the job, or being close to completion.
So what do you do when the job stops because there’s a construction or permit problem or it didn’t pass inspection?
First, you’ll probably be asked to adjust your contract accordingly, which is reasonable, causing you to push your end dates down and also messing up your cash flow.
Now, there’s a couple of pieces for you to watch out and ask for, including when they ask you to stop, for example:
- Ask to be paid for everything that you’ve done so far.
- Ask for some deposit for future work so that you can keep a space in your calendar.
Why’s that important? Because if you don’t, you’re just going to fill it up with other stuff and potentially not be available to them.
TIP: This is the argument of why you need to have that deposit!
The other piece fee-based designers get caught in is having like a final payment at the end based on the final walkthrough with the client.
More common than not, the client gets busy and they’re not really concerned about having a final walkthrough.
It’s great that they’re happy, but your contract is tied to that final experience in order to get paid.
What do you do? Go ahead and invoice them!
If the client says they don’t have time for that right now, you can send the final invoice with a note that tells them to let you know when you’re ready and you’d love to walk through the project with them, see if there are any little tweaks we need to do, and make sure they’re happy with everything.
This step helps you close the job out and get it off your books. And when you do that, it creates a space for a new one to come in!
This is a true win-win: your cash flow continues to move smoothly AND you are free to start new projects.
If you’re finding yourself in situations where your cash flow is at a trickle and you’re ready to take control, then let’s talk!
These kinds of issues are exactly why being a part of a thoughtful, heart-centered, and self-aware group of interior designers who are kicking butt and have your back is priceless for you and your business.
Until next time, design something beautiful and get paid what you’re worth.
Terri breaks down the walls of secrecy by sharing her 30 years of professional interior design and remodeling experience to help interior designers work smarter, not harder, and get paid what theyâ€™re really worth.
She provides private and group coaching to interior designers who want both a financially sustainable business and a life outside of work.
Terri teaches wealth consciousness and business systems that simplify and streamline their business processes.
Terri received her NCIDQ certification in 1993, and is a professional member of the American Society of Interior Designers (ASID) and Interior Design Society (IDS). She also received the 2000 ASID Interior Design Award of Excellence and holds an Arizona Contractorâ€™s License.