Architecture and Engineering Industry
Architecture and Engineering are vital to the design and construction of buildings, bridges, and other various structures. An architect creates drawings and plans for the aesthetic appearance of the structures and to meet the specific needs of the client.
The designs implemented by architects need to take into consideration the types of events that will occur in and around the structure. The industry has become more complex over the years as there are new materials and designs being used for energy-efficient purposes to help not only save in cost but also reduce environmental harm.
While architects focus more on the design, the primary responsibility of the engineer is to ensure the design meets all of the building codes and is structurally sound.
Both architecture and engineering work requires in-depth consultation with urban planners, surveyors, and others who may be involved in the design and implementation of various elements of the project. Typically, construction contractors work hand in hand with architects and engineers to make sure the project is built according to the design specifications.
Industry Challenges
Many engineers and architects don’t know whether their projects are performing profitably or if they are on a budget. A key issue for architects and engineers, like other professional service firms, is to capture the time they work by project and to bill the hours on each project to their clients timely. Timely billing and collection are central to the financial health of the business.
The common complaint we receive when speaking with engineers and architects is that by the time they realize they are over budget or losing money on a job, it is too late for them to make a change. In some cases, engineers and architects don’t know how the project is doing until it’s over.
CFO Strategies works with management to ensure their control procedures effectively capture time by project and that billing occurs timely. CFO Strategies provides reporting and financial information throughout the entirety of the project so that management can see how their jobs are performing during the project.
This will allow management to see profits based on the percentage of completion, the status of change orders, and the status of billing and collections along with anticipated cash flows and expected earnings. As a result, management will have the ability to modify plans and adjust projects before it is too late.
Here are some of the specific services we provide to Architecture and Engineering Firms:
- Work in Process Schedule
- Profit and Loss by Job (Project Profitability Analysis)
- Time and Costs per job as compared to budget
- Over and Under Billings Reporting
- Backlog by Job
- Developing Key Performance Indicators (KPIs) and Key Risk Indicators (KRIs) for your specific construction company
Other Deliverables we provide to architecture and engineering companies:
| Balance Sheet | Profit & Loss Statement (P&L) | Cash Flow Forecast | Annual Budget and Financial Business Plan |
| Earnings Forecast | General & Administrative (G&A) Expenses Vs. Budget | Accounts Payable Aging | Accounts Receivable Aging |
| Debt Covenant Compliance | Gain/Fade Analysis (Comparison of profit margins from period to period) | Development and analysis of KPIs (Key Performance Indicators) | Evaluation of Internal Controls and Development of Standard Operating Procedures (SOPs) |
| Comparison of actual results to the business plan | Other Ad Hoc Reports requested by management |
Additional Services CFO Strategies Provides
| Identify and develop new banking relationships | Work together with outside 3rd parties (CPAs, Insurance, Regulators, auditors) | Assist in recruiting and training staff | |
| Serve as a trusted business advisor | One-off projects such as mergers and acquisitions | Assist in implementing new regulations (PPP, EIDL programs) | Assist in Exit Strategies |