Success in your architectural firm takes more than creating great designs. It also requires excellent financial management. Likely, most architects would rather spend more time designing than crunching numbers, and architects provide a unique service that must be financially tracked in specific ways. While architects need overall financial management, it is also essential to track finances by the project, which is the only way to ensure every part of your business is operating as efficiently as possible. Below is some of the best accounting software for architects that every successful architect should consider in their financial arsenal.
The Best Accounting Software for Architects
How to Determine the Best Accounting Software for your Architectural Firm
Ability to Track by Project
Not every design project is one-and-done. Some architectural projects can take years to complete. Couple that with trying to manage other projects simultaneously, and you have the challenge to stay on top of everything. Doing so also makes it so much easier to miss overspending and low project pricing issues.
Utilizing project accounting software for architects offers a solution to this complex business issue. This type of accounting treats each project as its own business with income and expenses related to that project only. Project accounting allows you to manage the profit margins of each specific endeavor, lessening the likelihood of unnecessary and wasteful spending.
Frequency of Reporting
Project accounting gives you the ability to produce reports whenever necessary to consult with design managers and clients—being able to have financial information whenever needed offers the opportunity to make financial decisions quickly regarding the progress of each specific project. On top of this, there is more efficiency in the office. If financial information is constantly being managed, it prevents employees from having to stop working on other matters to prepare financial reports. Being able to analyze finances with the push of a button can change the efficiency position of a company quickly.
Tracking of Tax Information
When it comes to advancing your architecture firm’s accounting, saving money is one thing, and tax planning is another. You can make every effort possible to pay the least amount of money for supplies and other necessary costs and spend all of that saved money on taxes. Understanding your tax liability per job and overall will help you make better purchase and hiring decisions in your company. There is little worse in business than being unprepared to pay an enormous tax bill.
Again, because many projects don’t conveniently end at the same time your fiscal year ends, it can make tax planning more complex. An accountant service will track these income and expense reports for projects that will continue into the next year and help make sense of how your tax liability will look.
Track Important Project Dates
When evaluating accounting software for architects, another aspect of design project financial management is meeting deadlines. When companies design a project, the pricing is based on steps of the project being completed promptly. For example, if plumbing and electrical projects are running behind, it might be necessary to store other project elements until they are ready to be used. Paying for storage for flooring, fixtures, and other appliances will add to the project’s overall cost. These costs are typically not included in the preliminary budget of the project.
Having the ability to track the completion of milestones within a project can help make necessary financial decisions quickly. If one aspect of the project is falling behind, it could be required to work with contractors who can complete projects within your established deadlines.
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Manage Cash Flow
Employees, fixed costs, and contractors must be paid on time. If project payments are not flowing correctly, it could be challenging to make payment deadlines for your company. An essential part of designing a project is creating invoicing prompts. Some smaller projects that will be completed in a short period will be invoiced more quickly. However, long-running projects that might take years to complete will hinder cash flow. Using a firm that utilizes accounting software for architects will help design projects to provide the cash flow your company will need.
Along with resolving cash flow issues, using accounting software for architects will help to determine terms for how payments should be made. When an invoice is issued, there should be clear instructions on when that invoice needs to be paid. The accounting software will also help track which invoices are left outstanding, which makes collection efforts much more efficient, and it helps to keep track of cash flow due to come to your company.
Keeping Great Records
Ultimately, the goal of accounting software for architects is to keep impeccable records for your business. You should be able to gain a clear financial picture of your overall business and individual projects whenever you need them. In addition, reporting should be customized to your business.
At Fusion CPA, we understand that no two architect firms are the same, and it is our goal to meet your specific accounting and financial management needs. We have years of experience collaborating with architectural firms, and we’ll work hard every day to make sure your company thrives and operates as smoothly and efficiently as possible.
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.