How to track interior design fees from agreement to final payment

There is no single way to price interior design work. BIID's pricing guidance discusses fixed, hourly, percentage and mixed methods. Whichever method your studio uses, the fee tracker should start from the signed scope and payment terms, not a remembered quote or a total budget that also includes furniture and execution.

1. Separate design fees from project spending

Set up distinct lines for professional services (your design fee), reimbursable expenses (only if agreed), and goods, contractor or vendor spending. A ₹5 lakh client transfer for furniture is not automatically ₹5 lakh of design-fee income. Who contracts with the supplier, who owns the goods, and who is responsible for payment should be clear before money moves. BIID's FF&E guidance distinguishes an agent buying on the client's behalf from a practice selling as principal; the accounting and tax treatment in India should be checked with your accountant.

Your appointment should state the service schedule, fee basis, payment triggers, due dates, included revisions, expenses and how changes will be approved. BIID's contract guidance explains why the schedule of services and payment terms need to be explicit. If you offer both design-only and turnkey work, use a separate fee structure and cost record for each responsibility.

2. Build one fee ledger per project

A spreadsheet is enough. Put one row per agreed billing event, plus separate rows for approved additions or credits. The minimum useful fields are:

Do not mix before-tax fees with invoice totals that include GST in the same arithmetic. Compare fee values before tax, then track tax and gross receivables separately. Keep the actual tax invoice and payment evidence alongside the ledger.

3. See the four figures in a worked example

Illustrative example only: a design-only commission has a base professional fee of ₹2,40,000 before tax. The agreement allocates 20% to concept (₹48,000), 30% to developed design (₹72,000), 30% to working drawings (₹72,000), and 20% to handover (₹48,000). These percentages are an example of one contract, not a standard interior-design payment schedule.

After concept, the client approves an extra bedroom design for ₹30,000 before tax. The concept and developed-design stages have been invoiced, as has the approved addition. The studio has received ₹1,00,000 against those invoices. The ledger reads:

The ₹1,20,000 still to invoice is not overdue debt; it is future billing under the agreed triggers. The ₹50,000 is invoiced but unpaid; compare its due date with today before marking it overdue. If the client has paid an advance not yet allocated to an invoice, show it separately rather than subtracting it from the fee twice.

4. Capture a change before it becomes an invoice dispute

When a client asks for another room or an additional review round, log the request against the original scope. Write the proposed deliverable, extra fee or pricing basis, effect on the programme, and who must approve it. Only move the amount into the agreed fee after that approval. The BIID Code of Conduct calls for variations to scope or fees to be recorded and agreed in writing before the changed work starts; use that as a good practice principle, not as an Indian legal requirement.

For a fixed-fee job, check whether the request consumes an included revision round or creates new scope. For hourly work, agree the rate and any estimate or cap. For a percentage fee, define which cost base and which changes alter it. BIID's pricing overview explains why the pricing method changes the risk when project work expands.

5. Keep the GST record alongside the commercial ledger

For a GST-registered Indian studio supplying taxable services, CBIC's invoice rules generally require a tax invoice within 30 days of the supply of service. The commercial milestone in your contract does not replace that tax rule. If you receive an advance for taxable services, the GST portal guidance says service advances must be reported for GST; the CGST Act provides for a receipt voucher or equivalent document evidencing the advance. Keep the advance, receipt voucher, later invoice and adjustment linked so an advance is not counted as new cash twice.

Tax treatment depends on the exact contract and supplies. Ask your CA how to classify mixed design, procurement and execution work, whether an advance has been adjusted correctly, and what tax documents are needed in your case. The figures above deliberately exclude GST to keep the fee calculation clear.

6. Do a short weekly reconciliation

1. Check which deliverables have met their contractual billing trigger; mark any stage ready to invoice.
2. Match issued invoices to the ledger and match bank receipts to invoice numbers. Investigate unapplied transfers.
3. List unpaid invoices by due date, owner and next follow-up date; keep disputed amounts visible instead of silently deleting them.
4. Check open change requests. Do not add unapproved extras to the agreed-fee total.
5. Compare any procurement or contractor funds against their own purchase and payment records, outside the design-fee balance.

For a project checklist that links decisions and drawing issues to billing triggers, see the interior design project-management guide.

Sources and further reading

BIID material describes professional-practice methods; it does not set Indian fee scales or tax rules. Indian GST references below are from CBIC and the GST portal. Confirm current treatment for your contract with a qualified Indian tax adviser.

1. BIID — How to Price a Project: fee methods and fixed-fee scope risk.
2. BIID — Professional Practice: FF&E: agent/principal roles and client funds.
3. BIID — Why Do You Need a Contract?: service schedule, fees and programme.
4. BIID — Code of Conduct, section 3: written scope, remuneration and variations.
5. CBIC — GST Invoice Rules: time limit for issuing service invoices.
6. GST Portal — GSTR-1 Guide: reporting and adjusting advances for services.
7. CBIC — CGST Act, section 31(3)(d): receipt vouchers for advances.