Category Archives: Architecture

Dating Your Invoices

No, I am not talking about taking them to the movies and buying them a tub of popcorn, I am talking about the date you put on your invoice. Here is a little un-known trick that won’t work for every client but it will work in some instances for you.

If it is April 3rd and you are doing your invoicing for work you completed in March date the invoices March 31st rather than April 3rd.

But why? Because then for the person receiving the invoice they will read it as a March Bill and most companies will pay their March billings in April., but if it is dated April, even early April, it becomes a May payable. So instead of receiving your money in April you do not get paid until May.

So you may be able to accelerate the payment by a month simply by dating it the last day of the prior month rather then the first few days of the current month. This is probably going to happen more when you are billing larger organizations or agencies because they have accounting departments who often function on the monthly cycle. If you are billing a small company or a homeowner this probably will not have the same affect, but it never hurts to try.

So if you are issuing invoices for your engineering or architectural service within the first couple days of the month try dating the last day of the prior month.

The Right Time Tracking Software

Tags: Architecture, Engineering | Date Posted: | Author:

Does your architecture or engineering firm have the right time tracking software? If you are using spread sheets the answer is no, not even close. Spread sheets are great for doing math but are the wrong tool for project time tracking.

What you need is a database solution. Not just any solution but one designed for tracking time against projects. One built for your type of practice. One geared specifically for architects and engineers. When looking, make sure you find a solution that is easy to use and understand. You will need buy in from your staff so it has got to be easy to use.

Why is this so important?

Because it is only with the right tools that you will get the right answers. Answers such as how much time have we spent on this project and how does that compare to our budget. What is the cost of the time spent? You need to see in real time how your projects are progressing. With time records lock away in spread sheets waiting for the pay period to close before data is gathers leaves you in the dark.

Your time tracking system should also be capturing data about the time. Not just the employee and the project but also the phase of the job, the primary activity, the billing rate, the employee pay rate, your overhead factor, and your total labor cost. An even better system will also apply profit to the costs to show with direct labor, overhead, and profit accounted for, how much of your fee have you burned through.

TimeSlipsTime Reports

You need to see how time has been spent on your projects. With activities such as drafting, designing, administering, meetings, field work, etc. you can see exactly how time is sent on your projects and what the different activities are costing you.

Reporting would not be complete without measuring your utilization. What percentage of your time is earning money? Is you staff working efficiently? Are you spending enough time marketing? Utilization reports help you answer these questions.

Billings and Invoicing

Of course your time tracking needs to integrate into your billings. If your employees are logging their time into spread sheets how are you getting that info into your invoices? With a click of a button you should see a report of all the time spend in the last period so you know which projects are in need of billing.

Ties to Project Data

Your time slips should link directly to your projects and their phases. And you should be able to report on your time and project to see which projects are more time intensive. Being able to compare projects types and the time they take can help you decide which projects you should be chasing and which ones you should run away from.

Billing Rates

Finally you need to look at your billing rates. Does your solution calculate your blended rates for Labor, Billing and Overhead? If not you need a new system. How does your total cost with labor, overhead and profit compare to the billing rate values?

In a Nut Shell

The biggest cost in an architecture or engineering firms is labor. Having a simple time tracking system that reports in real time will help you keep a handle on project time so you can bring your project in on budget.

Project Data – Your Institutional Memory

As your firm goes through time you work on more and more projects with a wide diversity of requirements, features and challenges. Before you know it you have a history of projects with all kinds of useful information that can be used as a firm resource.

This experience is used to win new work, to illustrate your expertise to potential clients. It can also be used and applied to new projects. Rather than re-inventing things you can pull past items forward.

The question comes is how do you capture this information and which information should you capture. Our experience shows that it is only captured in the memory of the old dogs. That is, most firms use the “Hey Charlie” method of archiving and retrieving information. You know the drill. “Hey Charlie, do you remember when? or do you remember where?”

And to be honest logging this type of data can be overwhelming. Unless you have a custom database that is. This is one of the key features of Praesto – it captures your institutional memory.

What is the institutional memory of an Architecture or Engineering Firm?

Well is it all the project data that tells the story about your projects. Things like materials or features. Typically you would not have a need to know how many project you have completed with gypsum wall board, however you may need to know the last project with a Terrazzo Floor. So when logging information think about the types of things you would be asking Charlie about.

I doubt you would need to research on building with restrooms. However you may want to know about waterless urinals. Or perhaps projects with elevators, swimming pools or data centers.

By adding tags (key words) to your projects in a database you will have the ability to search through your history of work and find what you need – even when Charlie is not around.

Are project data gathering tools available?

Project Data, Tags, Keywords and Institutional Memory

Project Tags and Keywords

There are very few project management software solutions designed specifically for architects and engineers. And even fewer that have the data tracking features we are talking about here. So if you are in the marked for a solution make sure to ask if the one you are reviewing can capture your institutional memory.

A sound solution will not only allow you to track projects with tags but will also let you categorize your project into countless categories. By using categories for projects you can compare and contrast things like labor requirements and profitability. Imagine comparing your design-build work to your plan-spec. Or your office buildings to retail or religious to educational.

What is the profitability of projects with elevators compared to those without elevators? Without capturing the institutional memory on your projects you will have no way to identify your best projects.

Having a searchable database does more that just let you report on projects. It also enables you to leverage past designs which in turn saves time and money. If your architects and engineers can quickly find past projects with a particular feature they are integrating into a new project, they can save a great deal of time by coping details, specifications, and schedules. This time savings will add dollars to your bottom line.

In a nut shell…

Without a doubt it is worth the time to log your projects and capture their information. Now you just need a tool to help you do this.

“Keeping Client Promises” = CRM in the AE Industry (even for small firms)!

“Having a sure fire way to track and keep client promises” is my favorite way of describing the need for a CRM (client relationship management) system.  I know that the topic of CRM has been beaten into the ground — with much of my 25 year career in this industry having been spent selling CRM software, I know I have talked about it until I am blue in the face.  But it is a personal passion of mine to help firms make sure they do just that, keep client promises.

I love that phrase, I love helping people realize the true meaning of CRM.  And client promises encompasses so many things. Let’s break it down:

1. Tracking an important interaction such as a phone call or a meeting.

2. Keeping track of due dates on everything from proposals to drawings.

3. Having a place to track thoughts and ideas revolving around a project so you can share them with your prospect or client at a later date.

Sure, CRM systems can have elaborate tracking components and reporting capabilities but what it really comes down to is a simple need to record important details that you don’t want to slip through the cracks. It’s making sure that you know more information about your client than your competitor does.

And sometimes in the AE industry it is also being able to cover your “assets”.  By date and time stamping your entries you can also go back to a client with detail when issues arise and this can be important if you are in a “scope creep” situation where you need to resolve a time or billing issue on a project.

So does a small AE firm need a CRM system?  You bet they do.  Even if it is just a simple integration into your overall project database that lets you record a note and schedule a follow-up task, an electronic diary of sorts.  We all want to keep our client promises and it doesn’t hurt to have a few reminders.

Take a look at www.basebuilders.com to learn more about Praesto AE, the time/billing and project management system for small AE firms.  And, yes, it includes an integrated diary to track those client relationships.

3 types of knowledge AE firms need to manage — and 3 reasons why!

Managing knowledge. Document management. Intellectual property management.  All of these phrases are “buzz” words in the AE industry.  It is a hot topic right now because being able to use your project documentation and historical data is critical.  No matter what you refer to it as…being able to collect and store information about your firm, your clients and your projects is crucial to your business operations.

Capturing your institutional memory can mean different things to different firms but being able to easily search on and retrieve this information becomes invaluable as time goes by and personnel changes occur.  At a simple level, a small firm should at the least consider storing:

1. Correspondence Documents – transmittals, letters, emails

2. Notes regarding client contact – when you are chasing work or for follow-up tasks

3. RFIs, Sumbittals and Supplemental Instructions

You cannot afford to be without a system where you can track this information, link it to a client and/or project and fully search on it.  And, it would be even better if this same information was integrated into your complete project database where you are tracking all other details about your projects such as time slips, tasks, milestones, resource management and invoicing.

Even if you have a very small firm it will better enable you to compete with the larger ones when you have access to client and project data at your fingertips.  Why is it important to track your “knowledge”:

  1. If a project manager leaves your firm (for whatever reason), do you have full access to all of the information that otherwise might be in their head?
  2. It isn’t just your own turnover that you need to concerned with – think about your relationship with your clients.  If your client puts a new contact in front of you – how quickly can you bring them up to speed?
  3. One of the top warning signs of scope creep is a client that provides late or incomplete information.   Do you have easy access to the records that you need to give to your clients to document a situation such as this?

Visit www.basebuilders.com to learn more about the Praesto AE Time/Billing and Project Management system for small AE Firms – where you can track your institutional memory, of course.

5 Simple Ways to Improve the Average Collection Period for AE Firms

Collections. It might as well be a 4-letter word in the A/E industry.  I know many firms are chasing accounts receivables that are often as old as 90-120 days and I know your Principals would sleep better at night if they could keep the average collection period to closer to 45-60.

How can you improve your average?

1.  Require daily time entry of your employees. Real time access to data will help you issue invoices faster. Make sure your employees know how their time sheets affect your access to working capital.

2.  Produce clear, simple, accurate invoices so that your clients will have less room to question or delay payment.

3.  Breakout fixed fees, hourly and reimbursable components on your invoice so that if there are discrepancies you can easily ask for partial payment.

4.   Involve Project Managers in the invoicing process from time sheet review to invoice draft review to collections.

5.  Keep an integrated client contact database so that you can track your collection efforts.  Use your system to track your interactions to stay on top of the situation.

The Praesto AE Business and Project Management system will give small AE firms the functionality you need to keep your receivables under control.  We focus on giving small firms the same tools the “big” firms have in order to stay competitive – and keep it simple and affordable. www.basebuilders.com

Project Time: You’re selling your time right?

In this Blog Series “Breaking Down Praesto AE: A Business/Project Management Software Solution for the Small AE Firm”, I will be dissecting the software by each major area.  The articles include information about the system itself but also thoughts on how each component can help your firm improve productivity and increase profitability based on the feedback from our client base and industry tenure.

Project Time:  You’re selling your time right? 

Praesto AE will make your staff more efficient so billable hours are maximized.  When you can monitor where time is being spent on your projects you can be sure that you are using the right employees in the right capacity.  Our system gives you a snap shot that breaks out your time by Phase, Billing Rate and Employee.   You can also run various reports to further analyze where time is being spent.

It is critical that you are gathering time information from your staff in as much of a real-time manner as possible so that you can see if your projects are on budget and schedule before you run into issues.  If you give your employees insight into the project management reports that are derived just from simple time entries it will help them to understand just how critical daily time entry is to your firm.  Setup simple budgets so that you can easily see your budget vs. actual hours and know exactly where you stand on your projects.  One of our clients said it best, “It is great to be able to see the time spent by the entire team as well as individuals. Praesto AE makes it easy to see where money is lost when it is due to time spent.”

If you are using QuickBooks for your financial system but have spreadsheets or maybe even handwritten timesheets then you are probably spending a lot of time doing duplicate entries and double checking your work.  With our integration we save you time and money!  Use your industry specific timesheets to generate your invoices right out of Praesto as well (and then just push the invoice to QuickBooks for your accounts receivable and financial data)…but more on that next week!

ACEC Roundtable: Hiring/Retainment Ideas for Small AE Firms

My favorite part of my job is attending industry conferences!  I’ve always felt is important to keep a pulse on the industry so that we know what issues/challenges our customers are facing.  Education sessions at conferences and tradeshows are definitely worthwhile but roundtables with open yet structured conversations are invaluable.

The American Council of Engineering Companies (ACEC) Small Firm Council (SFC) Winter Meeting last week was no exception.   There were a variety of topics on the table for these Owners and Principals of 1-50 person Engineering firms that included everything from the Affordable Care Act to Social Media.  The conversation that really caught my attention was about Hiring.   I want to share a few observations from the trenches.

All attendees agreed that hiring Engineers is very tough these days and keeping them might be even harder.   Companies across the country are using a variety of hiring methods including Headhunters, interns from local colleges and career fairs.  However, these small firms mainly agreed that career fairs are hard for them to participate in because the Owner themselves don’t have time to attend and they don’t have the large marketing and HR department to represent them.  It was shared that it is important to build a relationship with your local universities so that the Professors and engineering department heads can be sure to educate about the small firm opportunities as well as the large.

It is key to note that it was also mentioned that across the board firms need to use their young bright leaders to help attract new hires.  These current employees can use their social media outlets, associations and social groups to help “spread the word” about your firm. Several people in the room also mentioned using hiring incentives to help attract key people and that this can be less expensive than using a head hunter.

Retaining employees was also a hot topic and the discussion included using additional incentives that varied from giving days off to do public service work, to letting people work from home when possible to offering a flex schedule.

My firm offers time/billing software so I was very intrigued with how firms track the flex scheduled and one comment from a Principal who said that he uses his time sheet tracking that offers real-time reporting to know who is working and when and what project /billable work they are getting done. “It is the management part of my job” he said.   I’ve always looked at the timesheet portion of our software as a tool to make sure you are billable or to have a pulse on staff utilization in general but it is also great to know that it can help you monitor flex time for your staff – and our system happens to also include an In/Out board that would definitely lessen the management time involved in this tracking.

Once again I learned that if I open my eyes to the challenges that AE firms face that I can happily help provide a solution.

Thank you, ACEC, for a great roundtable!

Project Management Software that is “almost as fun as a video game”!

We just received one of the greatest compliments about our business/project management software – ever!  “It’s almost as fun as a video game!”  And really, why shouldn’t it be?

One of the things that I hear most often from the small architecture/engineering firms that I work with is that they need their project management system to be simple.  They often call us because the systems they currently have in place are too complex or cumbersome and they just can’t get their employees to use the features available to them.   Because we also know what features firms in this industry need, after all we were developed by an Electrical Engineer, we made sure to include a full set of functionality.  Full featured functionality that is easy to use!

Do you want customer relationship management? How about proposal generation and tracking?  Scheduling? Budgeting?  Praesto AE has it all — but we keep it simple!    You have the ability to track notes and task assignments; you have a proposal module to build your fees and track the job you are pursuing; and you have a clear picture of milestones on projects and a resource management module.

As a software company we focus on being great at one thing – we want our clients to increase productivity and profits.  We purposely do not include our own accounting back-end but rather we integrate with QuickBooks.   If you are not learning an entire new accounting system while you are learning a new project management system – it is deemed more user friendly!  We enable you to run industry specific and project centric reports that are more informational than you get from QuickBooks alone but we also import your data out so there is no re-entering of data.

Our clients are often up and running within just a matter of weeks.  And, yes, that includes getting invoices out the door.  When your office manager or accounting personnel can produce efficiently and effectively they will find the fun in using the system.   When Principals give feedback that they love the invoice and report formats –  it makes it a joy to do your job.   And for our very small clients where the Principal is running the system themselves, we make it fun and simple!

Small AE firms tell us what they need in a Project Management system! Can you relate?

This past fall we surveyed our Praesto AE Business/Project Management System clients to find out what they love about the program and I want to share the results with you so can see what is important to these companies.

The respondents were from all flavors of architectural/engineering firms that range in size from the sole proprietorships to 40 employees – with the average size being about 10 people. We had a great response with a cross section of about 30% of our database participating.

When reading through the written responses to the question that was posed as “How has Praesto AE made a positive difference in your firm?” – I saw a common theme.  With a program like Praesto in place these firms felt that they can now better understand their utilization and profitability.   The key word that really hit me was “understand”, not only can they report on the project based figures but they can also understand them better because they know where the data is coming from and with full integration  and a central repository for that information they  know what they are looking at and they can trust it.   One client said that they really feel like it has helped their small firm to progress because they know where they are on projects with regards to time, money and profitability.

The second response that I saw over and over again had to do with invoicing.  Our clients told us that being able to invoicing more efficiently they can get paid faster.  One person also pointed out that they get paid more quickly when they have an invoice that is clear and easy to read and provides appropriate backup that is integrated right from time slip entry.   Wouldn’t you like your invoicing to be a “breeze”?

The last common theme had to do with our integration to QuickBooks.  Because such a large percentage of small firms are already using this widely adopted accounting system they don’t want to replace it.   They know the program, their CPA knows the program and they just want to add the front-end component for the business/project management that is so specific in this industry.   To that end, I heard from many people that having the information pushed from Praesto into QuickBooks to save from doing duplicate entry and to ensure accuracy is one of the most loved pieces of the program.

We had a lot of other comments about our real-time data entry, being able to plan ahead with the budgeting/scheduling tools, being able to prepare accurate proposals and track those and much, much more but the one comment that really summed up what our clients are looking for and what they get out of Praesto was this:  “We haven’t been using Praesto long but we immediately saw that our billing was out of line with our labor spent and we have been able to correct the situation already!”

I would love to hear from you if you can relate to our clients or if you have some of the issues mentioned above but haven’t yet found a resolve.