Factor Blog for Architecture & Engineering Firms

We can’t tell you how many times through the years a financial management role has been deemed “non-essential” to the success of the firms we’ve worked for or with. That is, until the time that the effectiveness of a firm’s financial management can make the difference between the business surviving and folding. Now, as the world struggles with a pandemic and the aftermath, is one of those times.

The COVID-19 pandemic has the U.S. and global economies staring into a significant recession. How will it affect your architecture and engineering (A/E) firm? That’ll be determined by how you respond to this challenge. One of the best ways to develop and implement a strategy for surviving a recession is to look back at the last serious economic downturn and review what worked and what didn’t for firms that were in business at the time.

The COVID-19 pandemic has the U.S. and global economies staring into a significant recession. How will it affect your architecture and engineering (A/E) firm? That’ll be determined by how you respond to this challenge. One of the best ways to develop and implement a strategy for surviving a recession is to look back at the last serious economic downturn and review what worked and what didn’t for firms that were in business at the time.

“Accountability”… it’s a word that people either love or hate, depending on whether they are expecting it or it’s expected of them. For architecture and engineering (A/E) firms — and really any type of professional services firm — it’s a concept that everyone should embrace, as it can drive significantly better business results.

Many architecture and engineering (A/E) firms see the terms “accounting” and “financial management” as synonyms. But the truth is that while they’re related, they are very different practices. And while limiting its focus to the former will allow an A/E firm to meet its financial obligations and survive, the latter is required for firms that want to thrive.

Many firm management systems on the market perpetuate the industry’s obsession with perfection. However, we’ve discovered that in order for firms to be financially healthy, they have to shake this obsession. Factor is designed with simplicity in mind and facilitates the production of draft financials within five days and final financials within ten.

Principals and managers at architecture/engineering (A/E) firms are often surprised to hear us say that while software packages can make time entry and tracking easier, they don’t necessarily make it more accurate. But, it’s true. The simplicity of the time entry function in these packages can, without proper policies and training, lead to inaccuracies.

Factor AE gives firms doing government work the tools they need to be FAR-compliant. When used properly, the system can minimize the risk of putting costs in the wrong accounts or the wrong format. This makes it easier to show auditors that the company is complying with government regulations and eliminates the fear of penalties.

What we know from our work with A/E firms is that the “what” of the project manager role is simple; the “how” is incredibly complex. And because the job is so complex, firm principals are often hesitant to give PMs the responsibility and authority they need to be effective in their work. The work gets done, but the principal ends up being far more involved than they need to be because they are the ones who have the necessary information about the project.

As we?ve learned from our work with architecture/engineering (A/E) firms, there are relatively few absolutes when it comes to operating them. But, here?s one: If you aren?t managing projects well, you aren?t going to be successful. And while there are many aspects to effective project management, spending less money than you have budgeted for them is a core competency for any firm.