Running an architecture business poses some unique accounting challenges, including tracking billable hours and accounting project by project. And, of course, you didn’t train and study all those years to focus on accounting rather than your clients and architectural designs. Is there a simple solution that could help?
While no solution will instantly fix every accounting problem a business faces, specialised software comes close. Here’s how – and why you should invest in it.
Accounting challenges faced by architects
Accounting for architects is a challenging task. On top of the regular financial statements, annual accounts and tax returns to draw up and file, they face some rather unique challenges:
- Tracking billable hours: An architect’s time is valuable as a service provider, so they need to find a time tracking method that reliably records the time they spend on a project.
- Cashflow management: Your ability to complete a project relies on liquidity, which the late payment crisis hardly helps.
- Project-based accounting: Architects must manage finances on a per-project basis, which involves tracking revenues, costs, and profits for each project separately while ensuring that costs are allocated to the correct project.
- Cost control: Architectural projects can easily spiral over budget due to unforeseen costs or poor estimates.
Managing these challenges is essential for architecture firms to remain profitable; specialised software will help you regain control.
How cloud accounting software can help
Cloud accounting software is a type of accounting program that securely stores your information on the internet. That means you can access your financial data from any device connected to the internet and take advantage of automation tools to streamline your financial management so you benefit from real-time data.
Here’s how else specialised cloud accounting tools can streamline financial management for architectural firms:
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Job costing
Cloud accounting software can help architects track project expenses in real-time, whether materials, subcontractors, or labour costs. Tools like Xero or QuickBooks allow you to categorise costs easily and can be integrated with project management software like Procure. This should help you stay within budget and improve project profitability with detailed, up-to-date financial insights.
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Time tracking
You can also integrate your cloud accounting software with specialised time tracking tools like Minute Dock – or use Xero’s tool in Xero Projects. This will ensure that every hour is logged and categorised by project, task or client. You can access these tools on your mobile phone and track your time no matter where you are.
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Invoicing and payments
Creating, sending, and managing invoices is simple with cloud accounting software. You can automatically generate invoices using preformatted designs and display your charges based on time-tracked milestones or flat fees.
You can also set up recurring invoices, send reminders for overdue payments, and integrate online payment systems like Stripe or PayPal with your cloud software for quick and secure payments. This should help improve your cash flow by ensuring timely invoicing and faster payments.
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Project-based reporting
Cloud accounting tools are brilliant for tracking each project’s revenue, costs and profitability. You can also create reports to help judge whether a project is on budget, allowing you to spot potential overruns and adjust your strategies accordingly.
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Collaboration and accessibility
Cloud accounting software allows multiple users, including accountants, project managers and team members, to access certain aspects of your business’s financial data from anywhere. This will be particularly useful for architecture firms with hybrid working patterns, as it lets everyone access the latest financials to make better decisions.
Get in touch with us
While cloud accounting tools offer excellent automation and real-time insights, navigating the unique financial challenges of architecture requires expert knowledge and a helping hand.
As accountants specialising in working with architectural firms, we can help you fully leverage your specialised software while providing personalised advice on tax, profitability, and financial planning.
Talk to us about our services.
