Standard Forms and Contracts - The Graphic Design: Reference and Specification - page 189

Definitive Estimate:
This is a time-consuming and detailed estimate created once the full scope of work,
final deliverables, and detailed work flow are known. A full work breakdown structure
(seepage66)iscompleted,theprojectisscheduled,andtheteamisassembled
before the estimate is prepared.
Eight Payment Strategies
Designerscanbecompensatedfortheirworkbywayofavarietyofpaymentmethods.
Clients and designers should negotiate a payment strategy that meets both of their
needs.Herearesomeinterestingoptions:
1. Fixed Fee
Agreetoatotalfeefortheproject.Invoice50percentbeforeworkbeginsand50per-
centuponcompletion.Billexpensesattheendoftheproject.Thisisagoodstrategy
for smaller projects with clear deliverables.
2. Progress Payment
A project is broken down into sequential phases of work, with the fees and, possibly,
expenses invoiced at the completion of each phase. Related to this is dividing an
agreed-upon project fee into monthly installments. These progress payments are based
on the calendar, and not the work completed, as is the case with the phased approach.
3. Modular
Dividealargeprojectintosmallermodulesofworkandbillthemasseparatejobs.This
works well for related but not sequential work. For example, design a company's corpo-
rate identity in January, and then do the website in June.
4. Retainer
Inthisongoingdesigner-clientrelationship,thedesigneragreestoafixedfee,typically
invoiced monthly, for a specific amount of work. This strategy is good for ongoing publi-
cations or clearly defined repetitive tasks—for example, developing a new top page for a
website every week.
5. Hourly
In this open-ended agreement, the client pays the designer a fixed hourly rate for every
hour worked on a project. Good recordkeeping is essential here. Some clients ask for a
not-to-exceed ceiling on hours prior to commencement of work to stay within a certain
budget.
6. Deferred
The designer and client negotiate a fee, but payment is deferred until a mutually agreed-
upon date. This is somewhat risky for the designer, but good for a client with a startup
business. Perhaps the fee negotiated is slightly higher than normal to offset the risk.