The fee was agreed before anyone knew what the project was.
“We agreed the fee in March. The project we are actually doing started in July.”
A design practice sells judgment by the hour against a fee fixed as a lump sum or a percentage of a construction cost that has not been established yet. Everything that happens afterwards is absorbed, billed as additional services, or written off — and which of those three it is tends to be decided informally, late, by whoever is closest to the client.
percentage of completion
effective multiplier
utilization
additional services
estimate to complete
retainage
sub-consultant markup
AIA
Your words, not ours.
Where it concentrates here
6 places the money tends to
go in a design practice. Each one is concentrated — a single agreement, a single queue,
a single account nobody reviews — which is why sampling walks straight past them.
Additional services performed at a client's request, acknowledged verbally, and never converted into an amendment anybody could bill against.
Estimate-to-complete on percentage-of-completion projects refreshed optimistically, so revenue is recognized against a finish date the project team stopped believing in.
Effective multiplier reported firm-wide while one studio or discipline runs structurally below break-even inside the average.
Sub-consultant markup taken at a rate the prime agreement does not actually permit, discovered at audit or at fee dispute.
Retainage held past substantial completion on projects nobody is chasing because the design team moved on eighteen months ago.
Professional registration by state and discipline tracked in a spreadsheet, where a lapse means a seal applied without current standing.
Not every design practice is the same business
Architecture and interiorsFees as a percentage of a construction cost that was not known when the percentage was agreed.
Civil and site engineeringPublic clients, prescribed fee schedules and approval timelines outside your control that consume budget while you wait.
MEP and structuralSub-consultant to a prime, with scope defined by somebody else's contract and changes arriving as instructions rather than amendments.
Environmental and planningPermitting and review cycles measured in months, with staff carried against projects that are technically live and doing nothing.
Testing, inspection and commissioningField hours billed against schedules that slip, where standby and remobilization are real costs and rarely recovered.
Where this data actually lives
Deltek Vantagepoint or Ajera; BQE Core in smaller practices
Revit and BIM 360 or ACC holding the model, separate from anything financial
Timesheets whose accuracy decides revenue recognition, completed on Friday afternoon from memory
A project accounting module the project managers do not open
Named because it changes what the intake asks for. An extract from one of these has known gaps, and the review is built around them rather than surprised by them.
Reported in your numbers, not ours
effective multiplier
utilization
estimate to complete
backlog
additional services captured
realization
retainage aged
project margin by type
The obligations that set the deadlines
Professional registration by state and discipline, per licensed individual
Professional indemnity renewal, with claims and notified circumstances
AIA billing applications, retainage and lien waiver deadlines on public work
Certifications that gate public bidding — DBE, MBE, WBE, SBE — and their renewals
State board continuing education records
What the review would ask you for
8 requests written for a design practice
and asked of nobody else — 4 of them core. They sit alongside
the operating spine every business has — finance, revenue, receivables,
payables, contracts, people, IT, operations, risk, commercial and governance
— which is 107 further requests.
Project list with fee basis and contract type CoreLump sum, percentage of construction cost, hourly-not-to-exceed or cost-plus.
Percentage-of-completion schedule with estimate to complete CorePer project. Revenue recognition depends on the ETC being honest rather than comfortable.
Utilization and effective multiplier by staff grade CoreDirect labor against raw and net multiplier, monthly.
Additional services requested, performed and billed CoreThe three are rarely the same number. Unbilled additional services is where fee erosion lives.
Sub-consultant agreements and markup appliedIncluding whether the prime agreement permits the markup being taken.
AIA billing applications and retainage heldAged, with anything outstanding past substantial completion.
Professional indemnity cover, claims and circumstances notifiedRenewal terms, and any project excluded from cover.
Professional registration by state and by disciplineA seal applied without current registration in that state is a live exposure.
Anything you do not have can be skipped in one
click, with a reason. The intake is completed in the
client portal, which saves each answer as it is given and can be
returned to as often as you like.
When this stops being interesting and becomes urgent
A project that lost money with nobody able to say at which phase it turned
Ownership transition or an ESOP valuation needing a defensible WIP position
A fee dispute, or a claim that puts the indemnity policy in play
A merger approach, where effective multiplier and backlog are the first requests
A bank line renewal against work in progress
Who this involves
Signs it: Principal, managing partner or finance director
Has been asking for it: The controller, who has been asking for honest estimates to complete
Who commissions it
Principals, managing partners and finance directors. Phase one is priced before phase two is
discussed, the report is yours either way, and we take no vendor commissions or referral
fees on anything we recommend.
The proposal sets out the sequence week by
week, what we would need from you, and what it costs for your number of operating
units. No call required to see the number.
Closest to this
Operations that share more with a design practice than the sector label
suggests.