What the COVID-19 Pandemic Taught A/E Firms About Remote Working
May 27, 2020
When the coronavirus pandemic forced architecture and engineering (A/E) firms to shift to remote working, it shed light on some critical failings in how companies view the technology they rely on. And while COVID-19 brought pain and suffering to businesses and families alike, there will be some lasting benefits from the lessons that A/E firms learned.
Back Office Systems: Essential to Success but Often Overlooked
As stay-at-home orders became the norm throughout the U.S. (and around the world), owners of small firms scrambled to better equip their teams to work remotely. Unfortunately, what we’ve found is that most of them have focused almost exclusively on productivity tools—CAD systems and other software that architects and engineers use to produce their work—and more or less ignored back office systems.
This is an understandable reaction to a situation that threatens a company’s revenue stream. But increasingly, firms are learning that it’s a shortsighted one. And in many instances, the disparity between “money-making” software and “business operations” systems predates the pandemic. Firms have, for years, been much more inclined to invest in the former versus the latter.
The new remote work requirement really just highlighted the fact that tools used to collaborate on projects have been given priority over those used for accounting collaboration. For example, while most firms have systems that let people submit timesheets from their desk, they’ve been shocked at how challenging that simple task can be when it has to be completed over the internet.
What A/E Firms Have Learned From Remote Working
From our conversations with clients whose teams are working remotely, here are the four most important lessons they’ve learned about back office systems and collaboration:
- Cloud-based accounting is safe.
Firms need to recognize that today’s online accounting systems are highly secure—typically more so than a system that resides on the company’s own server. Systems like Factor AE have security settings that protect data and make the different types of information accessible only to those who need it. The days when only accountants were allowed to access the accounting system are now gone, for the most part, and they should have been gone long ago. Firms that cling to that approach and insist on software installed locally on their server are in a world of hurt today. And that’s true not only because of the access limitations they’ve run into, but also because a fearful and controlling culture simply impedes productivity.
"If there’s one business lesson the coronavirus pandemic and sudden switch to remote work has taught us, it’s that AE firms need to ensure that when it comes to their mission-critical software solutions, there is no weakest link."
- A collaborative relationship between accounting and project management is essential.
Often these two groups aren’t truly collaborating and their strengths aren’t being leveraged effectively. A telltale sign is when accounting is responsible for setting up projects and defining the way timesheets are structured, when, in fact, project managers (PMs) are the ones that best understand the work to be done and how it should be approached and billed.
Remote working has made it very clear that having accounting drive project and timesheet setup is not a great approach. PMs who used to be able to walk down the hall to accounting to discuss projects and clarify certain things about them can’t do that anymore. As a result, firms are finding it harder to ensure that everyone is on the same page and that accounting has the data it needs to send out accurate invoices in a timely manner.
What successful firms are discovering—and what we’re strong advocates for—is that it’s best to let the people who are running the projects set up the projects. Obviously, it’s necessary to have some standards that PMs adhere to, but allowing them to modify a “template” to meet the needs of a particular project is key. And, this doesn’t mean that accounting is “surrendering control” in any way. It just means that this responsibility is put into the hands of the people that it most directly affects. Plus, accounting benefits from being relieved of their role as the “enforcer,” and is instead viewed as, and treated like, a collaborator.
Another area where this more enlightened and inclusive approach to operations is helpful is in budget reporting. At many firms, PMs are essentially “flying blind” regarding how their projects are progressing budget-wise because they need accounting to give them updates, which typically only happens once a month at invoicing time. This scenario is especially dangerous with a distributed workforce that can’t just pop into accounting to get the information they need. With online access to accounting information, PMs can identify issues like incorrect time entry before they become serious problems.
And finally, when it’s time to generate invoices, being able to collaborate effectively online is crucial. What we’ve found is that too many firms use antiquated processes in which invoices are generated, sent to PMs as documents for review, marked up by the PMs and returned, updated by accounting, and sent out again… through many cycles in some cases. And when PMs and accounting don’t have the luxury of face-to-face contact, the frustration and irritation skyrockets. The flip side is a cloud-based system in which PMs drive the process and accounting creates electronic invoices that are reviewed, modified, and approved online in a fraction of the time and without accounting becoming a bottleneck in the process.
- Automating banking and accounts payable is beneficial.
In an age when individuals are leveraging direct deposit, online bill payment, and other tech-enabled processes, it’s time that A/E firms do the same. Receiving paper checks, processing them, and taking them to the bank to make a deposit is an inefficient and outdated approach. Incoming checks can be sent to a lockbox and processed by the bank, and accounting packages like QuickBooks enable firms to make electronic payments. Ultimately, many financial processes can and should be automated, especially since having a financial institution—with all its oversight and security—play a central role in handling your money is just smart business.
The issue of managing finances with subconsultants can be a complicating factor. But it certainly isn’t an insurmountable challenge. PMs just need to approve invoices before accounting pays them, rather than feeding them directly into the automated payment process.
- KPIs have to be accessible online and on-demand.
This is where accounting should be spending its time in true operational support of the business. Financial statements and other high-level documents are important, but they aren’t granular enough to be of any help in operational decision making. The big five key performance indicators (KPIs) tracked by Factor AE have to be accurate and accessible at all times to ensure that system “dashboards” are reflecting a current financial picture in terms of project multipliers and utilization rates. Accurate information on projects can then be used to estimate things like profit and overhead that impact the firm’s overall financial standing.
Ensuring There Is No Weakest Link
As they say, a chain is only as strong as its weakest link. If there’s one business lesson that the coronavirus pandemic and sudden switch to remote work has taught us it’s that AE firms need to ensure that when it comes to their mission-critical software solutions, there is no weakest link.
Investing time and money to keep operational and back office systems current, and to implement processes that maximize collaboration, can make it easier for firms to survive the most challenging economic times and excel when the economy rebounds.
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