Flat fees offer designers a clear pricing model where clients know the total cost upfront. This can help clients create a budget and may eliminate potential disputes often associated with hourly rates. A flat fee approach simplifies the billing process — removing the need for meticulous time tracking — and ensures designers can clearly budget their projects while maintaining transparency with their clients.
Despite its advantages, setting a flat fee can be complex. Designers can risk undercharging for their services or presenting fees that don’t align with current market rates. Moreover, once a flat fee is set, it can be challenging to track whether the price was appropriate for the project’s scope. Without hourly billing, designers might struggle to monitor project progress and profitability, making it difficult to ensure that their compensation truly reflects their efforts and the project’s overall value.
Studio Designer’s latest features address these challenges, providing design firms with tools to confidently use flat fee billing. From accurate flat fee creation to invoicing and detailed financial reporting, Studio Designer tools help designers set optimal prices, keep projects on track, and understand their profitability.
Inspired and guided by the innovative flat fee billing system of DesignDocs, which Studio Designer acquired in 2023, Studio Designer’s new features provide designers with more accurate pricing tools and comprehensive financial reporting.
“Many designers prefer to use flat fees. For example, for experienced designers who have a well-established understanding of project scopes, using flat fees may be less complicated than time tracking, and dealing with time billing invoices,” says Erin Rittweger, Product Manager at Studio Designer. “We’re excited to offer a solution that addresses the complexities of design firm billing!”
1. A simple way to set flat fees
Studio Designer users can now easily set and manage flat fees. In just a few clicks, designers can create and name flat fees and add detailed descriptions to each flat fee, providing clarity on what each fee covers and setting accurate expectations about the scope of work and associated costs. A comprehensive list of all flat fees across projects provides a centralized view of financials, helping designers keep track of their overall billing more efficiently.
The real-time progress bar feature provides a visual indicator of how much of the fee has been collected versus the remaining amount. This allows designers to manage cash flow better and ensure projects stay within budget.
Early users are impressed with how simple and intuitive Studio Designer flat fee features are, allowing them to seamlessly incorporate these new tools into their ongoing projects. As one user shared, “This is great for projects when I’m quoting my services per job. And, I’ve used it for billing mileage!”
2. Want to use flat fees, but unsure what to charge? Try Studio Designer’s calculation tool
It’s essential that your flat fee rate reflects the value and scope of your work and makes sure the firm stays profitable. If you need more help determining what would be appropriate, Studio Designer offers a calculator to help designers determine an appropriate flat fee for a single project – input all design, project management, and consultation services that a project will require, and the platform calculates a suitable flat fee.
ALSO READ: 6 Reasons Why Time Tracking for Interior Designers is Essential — Even If You Don’t Charge Hourly!
If your firm is well-established, this calculator ensures your pricing remains optimized for every project. For firms who want to use flat fees, but typically use hourly billing, this calculator simplifies the process, making it easier to switch billing methods and ensure your rates are accurate and profitable.
3. Easily send and manage invoices
Sending invoices quickly means getting paid faster and keeping your business running smoothly. Designers can invoice clients for flat fees right from the Studio Designer platform, by selecting a project and setting the percentage of the total flat fee to invoice.
When creating an invoice, designers get real-time visibility into project progress by displaying both the planned fee and the amount already invoiced. This helps you keep track of payments and monitor how much of the fee has been collected, aiding in better financial management and ensuring timely revenue flow.
For example, for a multi-phase design project with a total flat fee of $25,000, a designer can set up three invoices: $8,000 after the initial design phase, $10,000 after mid-project milestones, and $7,000 upon project completion. This phased invoicing allows them to manage cash flow effectively and track payments as each phase progresses.
“Designers invoice in multiple ways for flat fees,” Erin Rittweger says. “For example, firms may invoice multiple times for one project. Studio Designer allows them to create a few flat fees for one project as it progresses, and invoice after those phases are completed. We want to offer flexibility for firms, so they can invoice their clients in the way most effective for their business.”
Also, users can customize invoice details, ranging from a simple fee name to a comprehensive description. This customization ensures that clients receive all information relevant to their project and understand its progress.
4. Track your time against your flat fee
Studio Designer offers robust features to help designers track their time, including a flexible Billable Rate Menu that allows designers to set accurate rates for everyone on their team.
However, even if you’re not billing by the hour, time tracking provides essential insights into how effectively and efficiently time is spent on different aspects of a project. This information helps designers understand the labor involved, evaluate productivity, and ensure that projects remain within scope and budget.
In Studio Designer, employees can easily record their time using either the Time Clock feature, which allows for real-time tracking, or by manually logging their hours. This flexibility ensures that all time spent on project activities is accurately captured, regardless of how you charge your client.
By associating tracked time with flat fee projects, designers gain a clearer understanding of how the cost of their time worked aligns with the fixed fees charged. This helps in evaluating whether the flat fee pricing is adequate to cover project expenses and ensures that your firm remains profitable.
For example, a designer working on a project with a flat fee of $5,000 can use Studio Designer’s Time Clock feature to log hours spent on design and client meetings. If the designer logs 20 hours at $100 per hour, the total labor cost is $2,000. Comparing this against the $5,000 fee helps ensure that the project remains profitable and within scope.
5. Comprehensive reporting to gain insights into the performance of your pricing strategy
Accurate reporting removes guesswork from setting and adjusting your flat fees. Designers can quickly run reports at any stage of their projects to see their flat fees alongside the time spent on a project, and the cost of that time. At a glance, you can see if you are on track to complete a project within budget, and if your flat fee is accurately representing the total cost of your work.
These insights also allow firms to make necessary adjustments to their pricing or business structure. No variance between what you’ve charged, and the cost of your labor indicates your flat fees are correctly priced; however, if there is a variance, you can increase your fees where appropriate or choose to delegate tasks differently. For example, you may assign a less expensive employee certain tasks to reduce costs. These insights are crucial to maintaining your firm’s profitability and let you adjust and optimize your flat fees with confidence.
Studio Designer is the leading digital platform for interior designers managing and growing their design businesses, featuring fully integrated project management, time billing, product sourcing, and accounting solutions.
Want to learn how Studio Designer can work for your design firm? Schedule a call with our team: https://www.studiodesigner.com/get-a-demo/
We can’t wait to connect.