As an architect, you have a keen eye for construction and design. You have spent years in school learning the art of drafting, but more than likely, you were never taught the importance of bookkeeping. Running your own architectural firm can be challenging. Dealing with multiple projects, job sites, and contractors can mean that you are always on the go. Trying to keep all of this organized plus having good visibility of your finances and the health of your business can be difficult.
Fortunately, we have some essential tips that can help keep your books in order and allow you to not only build buildings but build your business as well.
1. Move to the cloud
It may be tempting to use a program you are already familiar with to manage your books. Many small business owners immediately turn to excel to track their finances; however, this can often be a big mistake. Not only does it lack the functionality that your architecture firm requires, but it is also prone to errors.
One of the best things that you can do to optimize your bookkeeping process is a move to cloud-based accounting software. A cloud-based system will allow you to:
- Access all of your financial data remotely. This means you can quickly access information while on the road or at a job site from the convenience of your laptop or smartphone.
- Integrate with other cloud-based tools, making it easy to track and manage all of your finances, employees, and different job sites all in one place.
- Back up your files automatically so you never have to worry about losing any crucial data.
- Collaborate with external bookkeepers and accountants and give them instant access to all of the information that they require, without the hassle of sorting through stacks of reports.
An excellent cloud-based accounting software program should be able to easily integrate with your project management software, be easy to use, and assist you with project tracking and job costing. An excellent example of such a program is QuickBooks Online. With a bit of practice, you will quickly become comfortable with using this program and will be able to generate reports that will allow you to understand your business better.
2. Go paperless
Not only is going paperless good for the environment, but it is good for your business as well. Holding on to the endless paper copies of invoices, receipts, and other records can be cumbersome, taking up a lot of storage space. They can be challenging to track and can easily get lost. By going paperless, you can eliminate this hassle altogether.
Accounting software programs allow you to send digital invoices via email to your clients, eliminating the need for hardcopies and assisting with faster payment. Programs like Dext Prepare or HubDoc can assist with expense management tasks by allowing you to scan invoices and expense receipts to the cloud. This reduces the need for manual data entry. All you need to do is simply take a photo of the receipt and then toss the physical copy away.
3. Keep your books current
It is so easy to let your bookkeeping practices fall behind. The day-to-day demands of managing multiple different projects can make it challenging to find the time to address your books as well. By keeping your books current, you can always have visibility on your projects and your overall profitability. While you may not enjoy the financial aspect of running your firm, it is vital to address your books on a timely basis.
4. Hire a professional bookkeeper to manage your day-to-day bookkeeping
If you find it challenging to keep your books current, you may want to consider hiring a professional bookkeeper to manage your day-to-day bookkeeping. By outsourcing this task, you will be able to keep your books up-to-date and minimize errors. Some bookkeepers can even help with your payroll needs, giving you even more time to focus on more critical aspects of your business.
5. Simplify your billing
By simplifying your billing process, you can ensure that your clients fully understand their charges, speeding up the payment process. All of your invoices should include clear descriptions for each line item and break down costs for all services.
Your bills should clearly state the payment method, relevant banking info, currency, and they should be sent at regular intervals so your clients know when to expect them so they can budget properly. All of this will eliminate any confusion that may slow down your accounts receivable process and therefore affect your cash flow.
6. Keep a close eye on your receivables
One of the most critical aspects of managing your cash flow is staying up-to-date on your receivables. Software like QuickBooks Online can assist you in generating digital invoices and sending them to clients. It can also send out automatic email reminders when an invoice is coming close to its due date. Then, you can use Rotessa to set up pre-authorized debits and automatically withdraw payments directly from a client's bank account.
By keeping a close eye on your receivables, you will be able to see if any clients are late on making a payment, allowing you to send multiple reminders. If they are still dragging their feet and money is slow in coming to you, don't hesitate to stop working on their project. Stipulate these payment terms clearly on your contract.
When your books are in order, you always have clear visibility of your financial situation at all times. You can quickly identify cash flow issues as they arise and implement strategies to correct them before they get out of hand. By carefully managing your books, you will be able to manage your projects better, provide better service to your clients, create clear and accurate budgets and timelines and set yourself up for maximum growth in the future.
If you are looking for more tips on how to improve your bookkeeping practices or if you would like help from an experienced professional, Enkel is here to help. Our team of bookkeepers and accountants can help manage your architecture firm's bookkeeping and accounting needs. Contact us today to find out how we can help.