Fee overruns are one of the most common problems in small architecture practices, and one of the most avoidable. The practices that stay profitable tend to track their fees in real time, not at the end of a project when it's too late to do anything about it.
Why fee tracking matters more than billing
Most architects think about fees at two points: when they're pricing a project, and when they're raising an invoice. What happens in between, the actual tracking of time spent against budget, is where most small practices fall down.
The gap between what you quoted and what you spent is your margin. If you're not measuring it in real time, you're relying on intuition, and intuition tends to be optimistic. By the time you realise a project has gone over fee, you've often already done the work.
Structure fees by RIBA stage
The most effective way to track project fees is to allocate your total fee across RIBA stages before the project starts. This turns a single lump sum into a series of smaller budgets, each with a clear scope, a defined deliverable, and a natural billing point.
A typical split for a full services appointment on a residential project might look like:
- Stages 0–1 (brief and feasibility): 10–15%
- Stage 2 (concept design): 15–20%
- Stage 3 (spatial coordination / planning): 15%
- Stage 4 (technical design): 25–30%
- Stage 5 (construction administration): 15–20%
- Stage 6 (handover): 5%
Once you have a stage budget, you can track fee burn, the percentage of that stage's budget you've consumed in time, and compare it to the percentage of work you think you've completed. If you're 60% through your Stage 4 budget but only 40% through the work, you have a problem that needs addressing now, not at invoice time.
Understanding fee burn
Fee burn is the rate at which your time is consuming your fee budget. To calculate it, you need two numbers: the hours budgeted for a stage (your fee divided by your hourly rate) and the hours actually spent.
For example: if Stage 4 carries a £12,000 fee and your effective hourly rate is £80, you have a budget of 150 hours. If you've logged 90 hours and estimate you're 50% through the work, your burn rate is 60% of budget for 50% of output, a 20% overrun in the making.
Track fee burn at least weekly during active stages. A 10% overrun spotted at 30% completion is fixable, a 30% overrun spotted at 90% completion isn't.
Spotting scope creep before it becomes a problem
Scope creep is the most common reason projects go over fee. It happens when the client asks for something outside the agreed brief, additional design options, extra coordination meetings, changes to completed work, and the architect absorbs the time without raising a variation.
The best defence against scope creep is a clearly written appointment that defines what's included at each stage. The second-best defence is tracking your time carefully enough to notice when you're spending it on things that weren't in the brief.
- Note anything that looks like scope creep in your project log as it happens
- Raise a variation notice promptly, it's easier to have the conversation early than retrospectively
- Never absorb more than a couple of hours of additional work without formally recording it
- Review your fee burn at every stage gateway before confirming the fee for the next stage
Fixed fees vs hourly billing
Most UK architecture practices charge fixed fees rather than hourly rates for design work. Fixed fees are simpler for clients and create a cleaner relationship, but they put the risk of overruns squarely on the practice.
Hourly billing transfers that risk to the client, but creates friction and can feel adversarial. A hybrid approach works well for many small practices: a fixed fee for the design stages, with construction administration on an hourly basis (since the duration is harder to predict and heavily dependent on the contractor).
What a good fee tracking system looks like
You don't need complex software to track project fees, but you do need a consistent system. At a minimum, you need to know, for every active project, the total fee, the fee allocated to each stage, the time spent to date, and an estimate of work remaining.
A spreadsheet can do this, but it requires discipline to maintain. Practice management software like Archject connects your timesheets directly to your fee budget, so your fee burn updates automatically as your team logs time. The result is a live picture of every project's financial health without any manual calculation.
Ready to track RIBA stages properly?
Archject is built around RIBA stages from the ground up. Every project sits in a stage, and your fees, timesheets, and workload all connect to it automatically.