Audit Readiness for Interior Design Companies in UAE

Where interior design company records usually go wrong

Client deposits and stage billing on fit-out jobs

Interior design work is usually billed in stages: concept, detailed design, procurement and installation. Each stage should have its own invoice tied to a signed milestone, and the contract should state what happens if the client delays approval. Money received before the work is done sits as a liability until the stage is complete.

Keep a project schedule listing contract value, amounts invoiced, amounts received and the percentage of work completed. Where your own team does design and a subcontractor does the build, show design fees and fit-out costs on separate lines. This makes the margin on each visible.

Procurement for client projects

Furniture, lighting, fabrics and finishes are often ordered specially and paid for in advance. Decide whether you buy as principal, taking title and risk, or as agent on the client's behalf, because the accounting and the VAT invoicing differ. Write that decision into the proposal.

For each order, keep the quotation, the client's written approval of the sample, the supplier's invoice and the delivery note. Imported pieces add freight, customs and clearing charges. Allocate these to the project rather than leaving them in a general expense account.

Ask the supplier to name the project on the invoice. The cost can then be matched to the right client without relying on memory later.

Snagging, handover and retention

A project is not finished when installation ends. List snagging items with dates and costs to rectify, and keep a handover certificate signed by the client. If the client holds back a retention until defects are fixed, record it as a separate receivable with an expected release date.

Samples, mock-ups and showroom items bought for pitches should be tracked apart from client stock. They are either an asset of the studio or a marketing cost, not project cost.

Photograph completed rooms on handover day and file the images with the signed certificate. They settle most later disagreements about the condition of the work.

Records that should be on file

• Project list with contract value, billed and outstanding
• Advance payment ledger by client
• Materials purchased for each project
• Subcontractor agreements and progress statements
• Snag list and defect liability notes
• Showroom and sample stock records

Our scope, stated plainly