Charge It
Typically architects work with a contract (memo of understanding, letter form of agreement, contract but never, ever, on a verbal handshake… riiihhhttt!) which delineates the services to be performed and the fee to be paid. Frequently the contract also defines the “how and when” that payments are to be made.
Did you know that if an architect requires payment at completion of the services, there are more avenues available when payments go wrong? Did you know that if an architect allows payment to be made within some duration after work is completed, credit has been extended and a different set of “rules” apply when trying to secure payment?
I have a question from Rebecca, an architect in St. Louis. She says her firm (which does primarily small residential projects) has had more requests to pay architectural fees by credit card. Normally they say they don’t and they work out a payment plan. With the tight economy, they are trying to evaluate whether accepting credit cards and/or Paypal would help their business.
For starters, my personal view: They should be called “charge” cards and not “credit” cards – a charge card is paid off every month (I think it’s this mindset that has caused a big portion of the entire country becoming over extended; please think about it.). With that said, let’s discuss accepting credit cards. Philosophically professional services would be similar to “going to home improvement store and buying materials”… might we not want to stay head and shoulders above that? But considering the convenience issue, doctors accept credit cards (attorneys and CPAs do not). Determine your own stance on the issue.
Have you ever had a dispute with a merchant? If you have, and you couldn’t work it out and you charged the purchase, you could execute “charge back” rights within a specified period after incurring the cost (i.e., 90 days or so). Consider what your policy will be if a client pays for architectural services by charge card, gets contractor pricing on the project, and later decides he/she doesn't like something that was drawn. Will he/she contact their charge card company and ask for a credit?
The cost to accept charge cards can well offset a slim profit margin. Contact the bank that holds your business accounts and ask about its fees. Also contact your local “warehouse” store (Costco offers credit card processing for a percentage less than most banks).
I’m all for finding alternate ways to do business that makes sense and solves a real problem. I think the problem should be clearly stated and the philosophy to solve it should be sound, then the solution will become evident.