How to determine the billable rate of an architecture project?
Evaluating your fees depends on many parameters. Each company or self-employed person can, at their leisure, apply their own pricing grid according to numerous parameters. This is referred to as the billable rate. How to understand it, calculate it and optimize your fees according to your project? Response elements.
The billable rate, an amount subject to time spent.
The billable rate corresponds to the amount that the architect invoices for a mission: it is the sum of the fees that he presents to his client during a service, which will vary from one project to another or from one phase to another. But what criteria should be used to define this rate?
Let's take an example: Your client and yourself have just agreed on the terms of a phase billed at €10,000. Expressed in euros, this sum must translate into time spent, the basic unit for managing an architectural agency.
Who is the speaker chosen to deal with this phase and how much is charged for his working day? For the same amount, a senior project manager at €1,000 a day will have 10 days of work to devote, while a junior at €400 can spend 25.
The calculation of the hourly rate, essential to estimate its value
It will be understood that the architect is independent or practices in society, the objective is to sell its services at a rate that ensures a comfortable margin. A question often remains as to the parameters to be combined in the calculation in order to ensure that all the various costs inherent in the activity are covered.
As such, the sites of the MAF and the Order of Architects offer advice and assistance to fight against dumping or even help with recovery.
The latter also provides a “simple method for calculating the hourly price of the agency”, depending on numerous parameters. Suitable for all modes of practice, from the salaried architect to the liberal, this method claims to answer a question:
Knowing the time spent working for all businesses, once deducted the hours of internal administrative work, in essence not directly billable, how much must each hour be sold to reach a given level of income (BNC or "equivalent salary ", salary) ?
The resulting method of calculating the billable rate allows each architect to determine the amount of his services. Download the complete explanatory note, written by the Order of Architects by following this link.
While waiting for the deployment of the integrated OOTI calculator, planned soon, the Compta tools site offers one of the few dedicated to architects, accessible here: http://outils.compta-architectes.com/. It will allow you to estimate the billable rate of each member of a project according to their role: works supervisor, project manager, technician, etc.
Manage your fees with OOTI
Optimize its financial management via an ERP makes it possible to gather all the company's fees on the same tool, to easily compare the amounts associated with each service according to their nature and to adjust the hourly rates of the teams according to their evolution.
OOTI, allows you to define a default rate for each member of the agency within the “Team” tab then “Roles”. This rate can then be adjusted according to the project concerned, from the “Settings” tab then “Roles”.
A feature that will evolve soon allowing even finer control, which we will not fail to keep you informed!
The integration of these elements will then allow you to produce valuable data in the analysis of your financial management. Depending on the hourly costs, the time spent and the margin obtained, the management of your agency will be optimized and your profitability considerably improved!
Don't wait any longer, request a demonstration from our teams by making an appointment here.