Small companies usually face problems relating to payment processing. Architecture firms are one of those businesses that often have to face the issue of stuck payments. Because of this, they don't have the liquidity to take on a new project or complete previous ones. 

Therefore, if you want to know how architecture firms can deal with payment processing issues, this article covers all the things you need to know. We will discuss a few ways how you can deal with this issue and make your architecture firm more lucrative. 

Let's start by knowing the reasons for payment processing.

Factors that Result in Payment Processing Issues 

The focus aspects of why the payment processing issues arise are due to clients not paying up. There are several reasons why this can happen. 

Informal Process

The majority of architectural firms don't have a clear-cut payment process. They rely on sending an invoice any time they want. As a result, it does not have the influence or pressure necessary for clients to pay up their dues. 

In comparison with constructions contracts, the payment schedule of an architecture firm is too vague and is not standard.

Different Priorities

If the clients face a shortage of funds, they might prefer paying up the contractors rather than architects for the project completion. It is why they prioritize paying up the contractor so that the construction does not stop. 

Friendly Relationship

Many people tend to hire people or architect firms that they already know about. It is because clients want to work with someone they know and trust. While this can be great for building trust, it can often lead to payment processing issues. 

For instance, you might find it challenging to hold a strict conversation with your client regarding payments due to your previous relationships. It can contribute to liquidity problems that your architectural firm faces.

Lack of Interest

Another main issue that can arise is that clients might see a decline in the importance of an architect once they have the designs in their hands. They won't be under the same pressure to pay the architectural firms their money. 

The lack of interest in paying up after the clients get their designs can also create problems for your architectural firm. It is a transaction that is not like any retail deal where you give goods to receive money from clients and can take it back if they don’t make the payment.

Not Knowing the Value

Often clients devalue the hard work and the dedication it takes to get the design ready. They tell architects that it's usually the tools and technologies doing the work. Therefore, they might stop their payments and negotiate to reduce the amount they have to pay.

How to Resolve Payment Processing Issues for Architecture Firms? 

You now know why your business can face cash flow and payment processing issues, but how do you deal with them? There is no rocket science you need to apply to get your money from your clients. All you have to do is use these ways to receive payments on time. 

Take Token Money

The best way to ensure that your clients pay you money is by taking deposits from them. By taking money upfront, it can help you cover basic project costs and ensure that the clients will pay up in the future. In addition, you can know about the client's nature regarding paying money. 

If you can get the first payment from the clients without much of a hassle, it will be the same in the future. However, if the client is difficult to deal with in making the first payment, you might face the payment processing issue repeatedly.

Show Consistency

Consistency is important to show you won't be tolerating payment delays. It is best that you have a consistent attitude towards your clients who don't pay up on time. So, once the clients make a delay the first time, you tell them that you will only tolerate it this time. 

Be clear about how a delay in payments can affect their work. Also, you can let them know if they don't clear the dues for the previous projects, they won't get the next phase of their project. 

Choose your Clients Carefully

When hiring a contractor or architect, clients take a lot of time to ensure they find the best for their projects. So, why can’t your architecture firm do the same before taking up on a client's work? You can ask your clients for the source through which they will fund the project. 

It can help you give a clear idea of whether the clients have enough resources to pay you once the project is complete. In addition, you can check with their real estate realtors and other contractors if the client is easy to handle or not. Difficult clients can be a headache. 

They will keep an eye on everything and even stop payment once the project is complete by taking out baseless problems. Also, they can consume a lot of your time in useless meetings and meaningless conversations. Therefore, you must check on the clients before agreeing to them.

Set Clear Expectations

Last but not least, you must be clear about your expectations from the client. Be straightforward and let them know about all the costs they will have to bear. It will avoid any confusion when the time for the payment comes. In addition, let them know about the importance of cash flow. 

If the clients don't make payment on time, they might get a delay in the completion of the project due to your liquidity crisis. Also, you can add a clause in your contract that a delay in payment will lead to late charges. Communicate it with your clients beforehand; so you don't face payment processing issues. 

Final Word 

One of the fundamental problems many architectural firms face is payment processing issues. While your business might be profitable, it won't sustain with persisting liquidity issues. So, if you want to avoid getting into such a situation, you must use the ways in this article. 

In a nutshell, you must start by choosing the right clients from the beginning. You can set clear expectations by discussing with them before commencing the work. Furthermore, be clear about late payments and add a clause in your contract that you won't tolerate late payments and will charge extra fees.