Over the last 20 years eTrack has discussed business processes and practice management software requirements with about 10,000 engineering consultants, architects and other building professionals. These Thought Leadership Articles share trends, business practices and ideas we have gathered from our discussions.
1. Benefits of using % Based Quotes with Time Based Invoices
A practical way to minimise your risk AND keep your clients happy.
Have you ever provided a fixed price quote based on a client’s budget but later on find they wish to spend more? This can result in Clients being charged less for early project stages than the cost of the work.
You may have mitigated this by making the fee a % of the estimated building contract so if it goes up so does the fee. This is fair for you and may well be in the contract but can be disconcerting for the client who receives additional invoices for completed stages. To avoid this upset you could… more
2. A simple idea to keep staff within budgeted hours
How to ensure staff tell you *before* they run out of hours.
Why do we think of lawyers as well off? It’s not just the high hourly rates, it is because they bill every hour and expense.
Fixed price work is often estimated based on Hours * Rates. If you go over the quoted hours on a few large projects by say 10% that could be 100% of your profit gone and result in having to work long hours to deliver.
So, what could you do to stop staff going over their allocated hours?… more
3. Why staff efficiency is more important than you may think
Lose an hour of a staff member and it is gone forever.
Your staff may not realise but if each employee is ineffective for just one hour a week, that’s 12 minutes a day, then that’s a profit margin of 2.5% of turnover gone and you can never get it back!
If work is delayed or an invoice not sent you may have cash flow problems but it won’t affect revenue or profit if you can catch up. However, if you lose an hour of a staff members time it is gone forever. What you can and must do is… more
4. The problem with being Perfectionists
Why staff use up assigned hours, what’s the risk and what can you do.
Have you noticed that staff often use all their assigned hours? I believe this is because we are perfectionists and pan out the work to fit the hours given. Remember how much you get done the day before going on holiday when you give yourself less hours!
In the staff efficiency above I discussed the benefits of staff seeing the remaining hours in their timesheet, to ensure an early warning if more hours are needed. This is good, but if staff are working to the assigned hours, any delay will eat into your profit. To avoid this happening… more
5. How to track Effective WIP and why not to use % Complete
Easy ways to calculate Effective WIP using earned value.
Work In Progress (WIP) is an important measure to include in your monthly reporting. Positive WIP is work that has been done but not invoiced. Negative WIP is work that has been invoiced and not done.
However, some work may be ineffective due to rework, mistakes, getting up to speed and helping others and should not be included as WIP. If a Project, Stage or Variation is Fixed Fee you might also have under-estimated the hours needed. Only effective work, often called ‘earned value’ should be considered when calculating true WIP. An accurate and easy way to calculate this is… more
6. Time Management Tips
A bit of light relief -> five top time management tips that can really make a difference.
I feel you are never too old to refresh or learn new time management tips.. here are some good ones… more
7. Estimating Fees
Basic rules for avoiding costly oversights.
Here is a simple step by step guide on how many architects and other building professionals estimate fees. It is a ‘how to’ guide which presents a few simple calculations you can use to help ensure your fee estimate is both profitable and competitive… more
8. Calculating Charge and Cost Rates
Essential metrics to stay profitable.
How much is your time worth? Or the time of your staff? These are two of the most essential metrics in any architectural practice and can often spell the difference between profitability and loss. This ‘how-to’ guide will help you establish your hourly rates based on actual costs… more
