What to Know About Accounting for Architectural Firms
As the owner of an architectural firm, it’s essential to strike a balance between working on projects and managing core areas of your business, such as bookkeeping and accounting. Growing your architectural firm and maximizing your revenue is easier when you have a strategic accounting system that monitors all financial aspects of your business.
Accounting and Bookkeeping Tips for Architecture Firms
Managing your company’s finances may be daunting. To help you get started, consider these four accounting tips for architectural firms:
1. Track Project KPIs
Architectural firms handle multiple projects, each with its own financial data. While many companies focus on their financial performance as a whole, architectural firms must review the costs and income associated with individual projects to determine their profitability.
Track each project’s key performance indicators (KPIs), such as billable hours, gross profit margin, client acquisition costs and net revenue per employee. Recording and analyzing these KPIs helps you measure your firm’s current performance and work toward your long-term goals.
2. Monitor Your Cash Flow
Keeping track of the money coming in and going out of your business is critical to your company’s overall financial stability. One of the best ways to maintain a healthy cash flow is to stay on top of your billing cycles. To receive regular payments, you could request a percentage of the project’s cost upfront or a retainer fee before starting the project.
Remember to bill your clients periodically and check that their payments reflect on time. Set up and evaluate your statement of cash flow, a financial report that tracks these incoming payments and outgoing costs.
3. Explore Applicable Tax Benefits
Architectural firms may be eligible for certain tax provisions, such as the Work Opportunity Tax Credit (WOTC), a federal tax credit encouraging businesses to hire individuals from targeted groups. You can also reduce your taxes by deducting a few expenses, including rent, training, travel costs and health insurance premiums. The key to qualifying for these tax credits and deductions is to maintain detailed records of all invoices, receipts, income and expenses.
4. Outsource Your Bookkeeping and Accounting to a Professional
Hiring a professional accountant is one of the most effective ways to remain compliant and track your firm’s financial progress. Experienced accountants thoroughly understand applicable tax provisions, quality software and general accounting best practices. Professional accounting firms can record and analyze your company’s project-based income and overall expenses to help you track KPIs, manage cash flow and prepare taxes.
Connect With Marshall Jones for Expert Accounting Services
Marshall Jones has a team of certified public accountants and advisors to take on your architectural firm’s bookkeeping and accounting so that you can focus on essential business tasks and your clients. We can assist with tax planning and preparation, bookkeeping and a wide range of other accounting services.
Get in touch with our experts to streamline your architecture firm’s accounting system.
