Guide letter 11: Advice to client - architects' fees due

As correspondence shifts increasingly from mail to electronic forms, the letter and invoice referred to below may be in electronic form such as an email or invoice generated from an accounting software. In this case, similar principles apply.

1. When and how?

1.1 Before you can invoice for fees, you must have agreed the terms and conditions of your engagement (refer Guide letter 2: Confirmation to client).

1.2 If no formal agreement exists it is not too late to rectify the situation, but it might be difficult to negotiate favourable terms (refer 5.3 below).

1.3 This letter should be sent in accordance with an agreed program for payment: fortnightly, monthly or otherwise.

1.4 If regular invoices have not been paid, it may be prudent not to commence the next stage of work until progress payments have been made for previous stages. Such a condition could be included in your agreement.

2. Content

Advise:

• the current stage and extent of services completed
• agreed fee and payment program for attached fee tax invoice (refer Guide letter 2)
• applicable disbursements included in invoice (refer to agreement)
• electronic payment detail if applicable. 

Request:

• payment of fee tax invoice in accordance with agreement
• payment claim (refer relevant Security of Payments legislation) if you wish to commence action under this legislation and follow the relevant time bars.

3. Action

3.1 These letters must be written to establish and maintain proper business practice.

4. What happens next?

4.1 Regular invoices are rendered in accordance with a predetermined period of time for payment. If payment is not received within the agreed terms then send a reminder.

5. What can happen if you don't?

5.1 If you do not invoice for fees when they are due you may impose unnecessary financial stress on your business.

5.2 If you do not establish a regular pattern of invoices rendered with those clients who may be a little recalcitrant with payment, you increase your difficulties if you have to take legal steps to obtain payment.

5.3 If you have not made a prior agreement for professional fees you may find it difficult to collect any or all of the fees for a stage of services for which no fees were negotiated. You may have to cut your losses and immediately rectify your oversight. Send a fee proposal to your client for all phases of your engagement, which has to be agreed by both parties before you continue.

5.4 It is imperative for your business to maintain cashflow by receiving regular payments for invoices. Security of Payments Acts or similar legislation in some states and territories may assist in obtaining regular progress payments.

5.5 Note that payments to your subconsultants are also subject to Security of Payments legislation. Engagement of subconsultants can exacerbate your cash flow requirements.

5.6 Note claims under Security of Payments Legislation are restricted by timelines within that legislation. If you do not want to follow these timelines or halt work as may be required to fulfil your obligations, it is advisable to not present your invoices as a claim. By issuing all invoices as a claim it may restrict your ability to call upon this legislation at a later date if invoices remain unpaid. Jurisdiction variations apply.

6. Copies

6.1 Architect's file