As super-prime residential interior design and FF&E projects scale in value, many clients and interior designers prefer for the FF&E procurement budgets to be handled securely by a third party. Our accounts work equally for private FF&E purchases and for larger hotel, bar or restaurant OS&E projects - the principles are the same and the accounts work in the same way.
These accounts are hybrid client accounts, coupled with 'payments as a service' for interior designers who are working on large scale projects and seek support in managing their payments to suppliers for FF&E.
FF&E stands for 'Furniture, Fixtures and Equipment'. It is commonly used in architecture and interior design procurement teams as shorthand for all of the movable objects that are included in a project design. OS&E stands for 'Operating Suppliers and Equipment' and is generally encountered in a hospitality context for hotels, bars and restaurants, including everything from sheets and towels to stemware, cutlery, cleaning equipment and kitchen equipment.
One of an interior designer's most important roles, having designed the space conceptually, is to go out and order ('procure') those FF&E items that meet the brief and specifications, to consolidate those all somewhere (safe, dry and insured) and then when the building works are complete, to deliver, install and dress the project with them in accordance with the approved design.
It's a monumental task for the smallest projects, but as super-prime residential projects grow, FF&E Schedules can stretch into the 1,000's and even 10,000's of line items, costing many millions of pounds.
The client usually deposits funds with the interior designer to carry out this procurement activity, though very few (if any) interior designers are regulated by the Financial Conduct Authority to operate payment services in this way.
The 'normal' way of FF&E procurement serves as a substantial administrative burden on interior designers. Managing the flow of paperwork, specifications, approvals and funds is a full-time job that often sees highly-qualified designers spending significant time carrying out routine administrative tasks - for the design practice, this is an inefficient use of an important design resource that could be spending time generating revenue from design-related activities.
There is also an ever-increasing risk of payment "push fraud", with interior designers making attractive targets for would-be criminals who chance their arms submitting fraudulent invoices, or hacking supplier emails to submit different bank details for payments.
You may also have high-profile, politically exposed, or at-risk-of-sanctions clients which will increase your compliance, administration and ongoing monitoring overheads.
Finally, getting paid your procurement fees can be a challenge - on a 20% procurement fee, a budget of £100,000 only allows for £80,000 of procurement if you want to take your fee 'as you go' - clients will often pressure you to spend the £100,000 and invoice your fee separately, which could then take some time to pay.
As interior designers and procurement agents aren't regulated, they aren't required to segregate your project's FF&E funds separately from their own operating funds. This means that, heaven forbid, if your interior designer becomes insolvent during the course of your project, it could be almost impossible for an administrator to set aside your funds to return them to you.
That is not to say that interior designers don't segregate your funds - many will do so if for no other reason than to simplify their book-keeping and budget tracking for their finance teams, and to ensure that they have accurate records for you.
Similarly, it is a criticism sometimes levied at interior designers that their book-keeping seems opaque, they struggle to manage the FF&E budget transparently, or they don't show discounts or commissions they receive from suppliers.
These are third-party managed payment accounts for interior designers and their clients. Once the FF&E Schedule and budgets are agreed, the client enters into a procurement account agreement with us, and following our compliance checks we open a segregated account in their name to hold their procurement funds.
Each time the interior designer wishes to have an invoice paid for procurement against your account, they submit their invoice and written payment request to us (through our easy to use portal) and we make two payments:
1) to the Supplier for the amount to be paid; and
2) to the interior designer, for their agreed procurement fee/commission on the service.
This has the primary benefit of enabling the client to track their expenditure, but it also ensures that a detailed procurement process is followed, with purchase orders that match the agreed schedules for every FF&E item.
Our FF&E Procurement Account service includes:
This operates to remove a substantial portion of the risk and management cost of operating the FF&E accounts, allowing the designer’s procurement team to concentrate on the needs of the project and ensuring the security of the client's funds through a fully-auditable process.
For the client and their project, the principal benefits include transparency, security and cost:
The client has access to all of the detail of the orders made on their behalf, from the specifications and details of the order, to the invoices, details of the commissions/discounts and the payments made for each item, enabling them to keep an eye on the budget at every stage and for every purchase.
In the event that the interior designer becomes insolvent during the procurement process, the client's unspent funds are protected. In this way, the client can 'step in' to the procurement of any undelivered items and complete their procurement without needing to wait for the designer's insolvency process to complete for their funds to be released.
As we are aggregating payments in multiple currencies, often in bulk, each client gets the benefit of our combined buying power for FX - offering lower transaction costs where items are being procured from overseas.
For the interior designer and their project, the important benefits include process, time, security and resource:
You don't need to spend time and money growing your back-office accounting/payments team, and you don't need to tie up expensive staff resource on the administration of payments to suppliers for every purchase on the schedule.
As you are not making the payments, you are not likely to get defrauded. We carry out three-point fraud checks on all payments we make on the client's behalf to ensure that their money goes where it is supposed to.
In addition to the procurement payment service, you get to present your open book information to your client through a branded portal, offering them access to all of their product and invoicing information, operations and maintenance (O&M information), your progress against the FF&E budget, and more, without needing to employ any additional staff or needing incur any additional cost to your business.
If you would like any more information about how we can support the procurement process and ensure that client funds are spent only on their FF&E items, please don't hesitate to book a video call with one of our team.
dospay is a trading name of DOS & Co. Ltd, a company registered in England and Wales with company number 08294966.
DOS & Co. Ltd. is registered with the Financial Conduct Authority under the Payment Services Regulations 2017 (FRN: 833374) for the provision of payment services.
All of our escrow and third-party managed accounts are segregated and safeguarded at the Bank of England.
