Tracking Payments & Cash Flow in Interior Design Projects
Most interior studios are killed not by lack of projects but by cash flow gaps inside projects. A 30-day delay on a milestone payment combined with a 7-day advance vendor commitment can sink a studio that looks profitable on paper.
This is the cash flow playbook every studio principal should run.
The five cash positions to track per project
- Quoted value — total project value at quotation.
- Invoiced to date — total of tax invoices issued.
- Collected to date — total payments received (cleared in bank).
- Spent to date — vendor payments + material + labour for the project.
- Open commitments — POs raised but not yet paid.
Cash position per project = Collected − Spent − Open commitments.
If this is negative for more than 7 days, you are financing the project from another project's cash. Compound this across 5 projects and you have a cash crisis.
The standard interior milestone schedule
A clean cash-positive schedule:
- 30% on confirmation (before any procurement).
- 40% on dispatch of major materials.
- 20% on installation of carcass / civil completion.
- 10% on handover.
Front-loading the advance is critical. Studios that quote 10% advance and 90% on handover are running on debt.
Milestone triggers — the rule
Tie each milestone to a trigger you control, not one the client controls.
- "On dispatch" beats "on delivery" — you cannot control client availability.
- "On installation of carcass" beats "on completion of room" — partial completion is hard to define.
- "On handover" beats "after 7 days of occupation" — clients delay.
Invoicing discipline
- Issue the next milestone invoice the day the trigger is hit. Not next week.
- Send via email + WhatsApp + a follow-up reminder at +3 days, +7 days, +14 days.
- A clean GST invoice is paid 40% faster than a hand-typed one.
Vendor payment terms — negotiate them
Standard vendor terms are 30 days credit. Many studios pay vendor advance, then wait 60 days for client payment. That is a 90-day gap on your money.
Negotiate:
- 30/30/40: 30% on PO, 30% on dispatch, 40% on delivery.
- Or 0/50/50: nothing on PO, 50% on dispatch, 50% within 15 days.
Two qualified vendors per category gives you negotiation leverage.
The cash flow forecast
Every studio principal should run a 13-week rolling cash flow forecast:
- Week-by-week expected inflows (client payments by milestone).
- Week-by-week expected outflows (vendor payments, salaries, rent, taxes).
- Net cash position each week.
If any week shows negative cash, fix it now — not in week 8 when it arrives. Either pull a client payment forward, push a vendor payment, or trigger a working capital draw.
Late payments — the script
When a client is 7 days late on a milestone:
- Day 7: Polite reminder over WhatsApp + email. Include the invoice link.
- Day 14: Phone call from PM. "Just confirming — any issue with the invoice?"
- Day 21: Formal email from principal. Mention the contracted late-payment clause.
- Day 30: Pause work on the project. Inform the client in writing.
Most late payments resolve at step 2. A studio that never pauses work for non-payment trains clients to delay.
Cash flow red flags
- Any week with negative net cash.
- Any project with collection lagging spend by more than 15%.
- Vendor payables aging past 45 days.
- Salaries paid from project advance (mixing pools).
Tools that pay back fast
- Quotation + invoicing system with milestone tracking (Intorza handles this).
- Bank account per studio (not personal account). Use sub-accounts per project if your bank supports.
- Cash flow sheet — Google Sheets is fine; the discipline matters more than the tool.
What to do next
Open your books. For every active project, compute: Collected − Spent − Open commitments. Any project with a negative number for more than 7 days gets your attention today.
Intorza shows per-project cash position in real time, with automated payment reminders and milestone tracking. Start free →
Related: