Tip of the Week: Organization

Many have chosen to forget the impact of the Great Recession on architecture firms. According to the US Department of Commerce, architecture firms nationally lost over $14 billion in revenue or 21% of their 2008 billings during the downturn. The loss of revenue caused downsizing of over 60,000 payroll positions with over half of these losses estimated to be architecture positions. Now, as the market recovers, firms are looking at a variety of strategies to help offset the losses they suffered during the decline.

During the downturn, many architecture firms had to adapt to survive, making difficult decisions to remain viable. An architect friend of mine had to take a cut in pay of nearly 80% and lay off more than 50% of the staff in order to stay afloat. This was dramatic and painful, but necessary for the firm to survive.

Architecture firms tend to be small, with the majority having less than 20 employees. But the data from the 2012 AIA Firm Survey reports shows that the share of architectural firms that are very large (with 100 or more employees) declined by half from 2008 to 2011. More telling is that a larger share of firm billings shifted to the smaller firms during this same period. Although mid to large size firms continued to generate the majority of billings, smaller firms were responsible for more than 1/3 of total firm billings in 2011, compared to 1/4 of billings three years earlier. It’s likely that a number of larger firms closed due to the downturn, with their architects scattering to smaller practices.

Now that the economy is on the upswing, architecture firms have had time to reflect and recalibrate so not to repeat the austerity endured during the Great Recession. The focus now is on streamlining processes and reducing administrative duties to increase project profitability. Learning to better utilize current staffing and doing more with less. Leveraging cloud software for tasks that were once performed manually to increase greater efficiencies.

One issue that often plagues architectural firms is the ability to accurately track and record billable time spent on a project. Notebooks, It is not uncommon for a firm to lose 30% of its billables due to poor time management processes. Using an easy, desktop and mobile time billing app can help architecture firms capture every minute and accurately record time. Knowing exactly how much time a project consumed can help in forecasting future project costs. The same time tracking can be used for nonbillable hours to help better utilize staff and increase productivity. For instance, creating an invoice is typically not billable time, but understanding the process and the time to invoice can help in developing more streamlined processes that reduce overhead costs. Time tracking can be pivotal to capturing billable project time while reducing overhead.

Accurate time tracking leads to accurate expense tracking. Expenses can begin as a small financial leak to a raging stream of lost revenue. Capturing every expense and recording that expense at the time incurred is always best. Look for an app that offers on-the-go expense tracking by photographing receipts and syncing with the master project record. This way you can plug the financial drain of lost expenses.

As mentioned, invoicing not only costs a firm administrative time, it also creates a number of other different issues. For instance, if an invoice lacks clarity or detail, a client may wait to pay or request additional documentation in regard to support invoiced line items. This not only impacts a firm’s revenue stream it can be the beginning of eroding client trust. Ensuring every invoice has the detail needed to clearly identify work performed and the value to the client is critical to an invoice being paid in full and in a timely manner.

Lastly, leveraging an end-to-end software solution that solves these issues can help a firm focus on the next project rather than manually managing current work. A software that includes time and expense tracking, project, client and document management, plus invoicing with convenient online payment options can help a small architecture firm reduce costs, better utilize staff and provide clients the transparency and convenience desired to remit payment on time. Bill4Time offers a flexible, easy to use time and expense tracking for accurate invoicing. Invoicing is clear, ensuring value-added descriptions of work performed and offers a secure client portal with convenient online credit card and PayPal payment options. Bill4Time offers architecture firms a one-stop time billing solution that meets their needs and scales as they grow.

Register for a free trial and learn more about Bill4Time time billing software for architects.

 

A “job” consisted of working every day from 8am to 5pm and getting a full range of benefits, including medical, dental, vision and if you were really lucky, a 401K and a matching contribution. But since the Great Recession, the word “job” has been redefined to include work done on a short-term basis. Hence, freelancing was reborn. Freelancing refers to work done on a job-by-job basis and there is typically no obligation to a client once a job has been completed. Essentially, you are your own boss, working from home, determining your wages and your work schedule. How to Get Work

Freelancer.com launched in 2009, boasts nearly 17 million registered users and offers a variety of free to fee plans. Freelancer charges the employer an introduction fee when an employer awards a contract to a freelancer.  Freelancers are charged each time they are paid even when a single employer makes payments to the freelancer for the same project. This site has a membership fee which ranges from $4.95 to $49.95 monthly so perform your due diligence before registering.

Elance is one of the top sites and was started in 1999. Known for its reliability, Elance connects freelancers with clients who offer a wide variety of work. Elance does offer free membership packages, but most users find that it is worth paying the monthly fees as this allows you to bid on more jobs and create a more detailed and attractive profile.  Note that Elance charges a commission fee of 8.75% of the hourly fee when jobs are completed.

Upwork (formerly Odesk) offers no memberships or strange pricing structures. It is easy to navigate  and provides one of the most simplified payment policies by charging 10% of the freelancer’s pay to the client. Additional fees are charged when the freelancer withdraws funds, but the fees are nominal. Freelancer payments are made through PayPal or a credit card.

Guru is another site that offers a broad range of freelancing opportunities. As with Elance, the site is free to use; however, users have the option of paying for upgraded memberships. Headquartered in Pittsburgh, PA, Guru.com launched in 2001 and boasts more than 1.5 million gurus that are willing to tackle any project. Guru charges a commission; however, it was not published on their site.

Scriptlance is geared mostly toward freelancing programmers and web designers, but also offers writing and marketing related jobs. This site does not charge membership fees, but Scriptlance takes a 5% cut of the bid price. Payments are made through PayPal, bank wire, FedEx check or you can have Scriptlance send you a Mastercard debit card.

How to Get Organized

Dropbox and Box are great organizational tools for storing documents, projects, images and other files in the cloud. What also makes them so useful is that you can share the contents of your folders with clients, which eliminates emailing large, bulky files. You can easily sync your files with your Dropbox or Box, ensuring accessibility anywhere you go.

How to Get Paid

Ineffective time tracking can be costly—upwards of 30% of revenue can be lost due to inefficient time tracking. Bill4Time provides easy to use time tracking, contact management and invoicing so you can easily manage clients and projects.  Bill4Time helps freelancers accurately capture every minute even when on-the-go. For flat rate projects, Bill4Time helps freelancers better manage time and learn their true hourly rate and the cost of the project. Plus once a client is invoiced, Bill4Time offers a secure client payment portal so client’s can make convenient online payments by credit card or PayPal. Sign up for a free 30-day trial.