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Fee structure and billing method are different questions
The fee structure answers "how much, and on what basis". The billing method answers "when, and how do we invoice it". The AIA's guidance notes that percentage-of-completion and milestone billing work with stipulated sum fees, fees based on a percentage of construction cost, and other fee structures. So a firm can set a fee one way and bill it another.
The six methods the AIA describes
| Method | How it works |
|---|---|
| Retainers | Advance payment at the start of a project to show client commitment and cover initial effort |
| Percentage of completion | Invoicing based on the percentage of completion of active phases |
| Hourly billing | Invoicing the hours worked in a period, often with a defined not-to-exceed limit |
| Monthly fee schedule | Predetermined monthly amounts, calculated by dividing each phase's fee by the months allocated to it |
| Project milestones | Payment tied to completing specified portions of the project or phases, sometimes with partial payment on completion and the remainder on client acceptance |
| Work when paid | The client pays in advance to cover work until the next milestone |
Choosing per phase
Most real projects are not entirely one thing. Defined stages suit a set fee billed by percentage complete. Stages whose scope depends on the client or a third party suit hourly billing. Fixed fee or hourly argues that the decision is better made one phase at a time than for the whole commission.
What software has to support
If a project mixes methods, the billing software must hold a different method for each phase and still produce one invoice. Ask any tool to show a fixed phase billed by percentage complete and an hourly phase on the same invoice. The architecture project management software guide includes that in its evaluation test.
In Rizqo, a phase is fixed, hourly or non-billable. Fixed phases are billed by percentage complete and hourly phases from logged time, and one invoice can carry both. Retainers, monthly fee schedules and milestone billing are not documented as separate features, so check how your own agreement would be modeled before relying on them. Architecture billing software walks through how an invoice is built.