Architects’ Fees and Financial Management
This is such a hot topic as the fees charged by architects can vary very significantly for a multitude of factors, and since the Royal Institute of British Architects (RIBA) abolished their indicative fee scales, there is very little benchmark data freely available.
Making a good profit should be integral to any business so running an architectural practice is no different. Architects are required to be financially savvy or they will suffer the consequences of the inevitable peaks and troughs of running a practice.
Accounts are filed annually for 4 main parties with different purposes:
• Filed annually to Companies House (statutory requirement for limited companies)
• Investors: as they have a financial stake in the company
• Creditors: lending institutions including banks
• Managers: have direct interest in a company including staff and unions, and are responsible for preparing information for management purposes
Making a profit should be integral to running a practice, and, in most cases, projects should make a profit.
It may occasionally be worth taking on a project with little profit potential where the prospect of getting future projects from an active client looks favourable. However it should be noted that active clients sometimes use this temptation of future work as a means to attract lower fees from consultants.
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