Contract - June 2014 - (Page 34)

PHOTO COURTESY RICHARD POLLACK COLUMNIST Financial Management for Firms: Accounting, Billing, and Budgeting by Richard N. Pollack, FAIA, FIIDA An old adage about our profession is: "What does a designer or The result is an increase in revenue and, hopefully, profit. Designers are architect do when they inherit one million dollars?" Answer: "They keep often reticent to ask clients for additional services, but that should not practicing until it's all gone." The truth is that it is quite possible to make be the case. Think about how often a contractor will submit change a good living in the profession, and that requires a firm to be run with orders. Also, attorneys often bill in six-minute increments and try to robust financial management techniques and controls. As management charge for all the time they spend, and the most senior attorneys bill guru Peter Drucker says, "If you can't measure it, you can't manage it." the most time and money. In order to do the design work we love, The first step is to purchase an appropriate accounting and I believe that we must receive the revenue to properly compensate project management system-a product for straightforward staff, and account for all the time spent on projects. accounting, such as QuickBooks, as well as project management Another key component of strong financial management is software that can record staff hours and track staff time spent against establishing a smart budget for the following fiscal year, with the fee projections. The most effective program is one that serves both starting point being expenses related to the firm's strategic plan. Using accounting and project management functions, and just a few this approach makes the budget a stronger component of the tactics examples for architecture and design professionals are: Deltek, used to achieve the firm's strategies. The detailed budgeting process Ajera by Axium, and Clearview by InFocus. With business software's also focuses leadership more tightly around the strategies. movement to the cloud, the product you choose should have full An effective approach to validating the budgeted expenses is online capabilities, including the ability to back up data online. I am to review expense categories from the previous three years, coupled not a software expert, and I suggest that you conduct your own with updated firm strategies. For example, strategy might include research on the best program for your firm. developing a new project type, such as healthcare. In order to penetrate On the matter of recording time in the project management such a market, there is a need to create new collateral, attend system: Your staff should be able to input their own hours from healthcare design conferences, and hire staff with more experience wherever they are, but timesheets still need to be reviewed by project in healthcare design. The annual budget would show all the anticipated managers or principals prior to finalizing and invoicing. Even with the expenses associated with diving into the new market, and would also process completed online, my suggestion is to make the most of your enable the firm to track success in getting there. face-to-face meetings. Have all timesheets submitted and reviewed Budgeting revenue accurately can be a challenge, but the prior to a consistent weekly morning staff meeting at which those starting point is, again, to review the previous three years' income, responsible for reviewing hours can raise any questions, and overlaid with external economic realities. I always attended economic make edits or corrections. forecasts presented by municipal government, dedicated real estate Principals at some firms do not complete timesheets-you know associations, and the regional real estate community with the intention who you are. If that is the case, the firm is definitively not getting the of getting information on market factors affecting interior architecture. highest potential revenue and profit for both hourly not-to-exceed and If a firm's leadership does not fully utilize the systems and fixed-fee projects. In addition, almost every design firm has staff not procedures that I outline in this month's column and budget recording at least some of the time spent on projects, especially effectively, they cannot measure performance, and therefore, overtime, and the result is that the initial project fee is no longer cannot prosperously manage the firm. accurate and staff are typically not getting paid for those extra hours. Ensuring that all staff time at all levels is captured enables a firm to Richard N. Pollack, FAIA, FIIDA, writes a regular column for accurately measure which project types, internal teams, and clients Contract on business practices in design and professional are the most profitable. development. Pollack is the CEO of San Francisco-based Pollack Every company needs a certain level of pressure to exceed Consulting, which supports firm growth and success through business expectations and goals. By recording all time spent, the staff improved business development, winning presentation techniques, managing projects are pushed to identify any potential scope creep recruitment of top talent, business coaching, and ownership to the client, and to follow up with requests for additional services. transition implementation. 34 contractdesign.com JUNE 2014 http://www.contractdesign.com

Table of Contents for the Digital Edition of Contract - June 2014

Contract - June 2014
Contents
Editorial
Industry News
Columnist: Financial Management for Firms: Accounting, Billing, and Budgeting
Product Focus: Disappearing Act
Product Focus: Pulling the Wool
NeoCon Preview
Pinterest
Funny or Die
Stripe
FiftyThree, Inc.
A Steward of History
9/11 Memorial Museum
Designers Select: Seating
Sources
Ad Index
Exhibition

Contract - June 2014

http://www.nxtbook.com/nxtbooks/contract/201911
http://www.nxtbook.com/nxtbooks/contract/201910
http://www.nxtbook.com/nxtbooks/contract/womeninbusiness_2019
http://www.nxtbook.com/nxtbooks/contract/201909
http://www.nxtbook.com/nxtbooks/contract/201908
http://www.nxtbook.com/nxtbooks/contract/20190607
http://www.nxtbook.com/nxtbooks/contract/onpp-foresight_2019
http://www.nxtbook.com/nxtbooks/contract/201905
http://www.nxtbook.com/nxtbooks/contract/201904
http://www.nxtbook.com/nxtbooks/contract/201903
http://www.nxtbook.com/nxtbooks/contract/20190102
http://www.nxtbook.com/nxtbooks/contract/201812
http://www.nxtbook.com/nxtbooks/contract/womeninbusiness_2018
http://www.nxtbook.com/nxtbooks/contract/201811
http://www.nxtbook.com/nxtbooks/contract/201810
http://www.nxtbook.com/nxtbooks/contract/201809
http://www.nxtbook.com/nxtbooks/contract/20180708
http://www.nxtbook.com/nxtbooks/contract/201806
http://www.nxtbook.com/nxtbooks/contract/201805
http://www.nxtbook.com/nxtbooks/contract/201804
http://www.nxtbook.com/nxtbooks/contract/201803
http://www.nxtbook.com/nxtbooks/contract/20180102
http://www.nxtbook.com/nxtbooks/contract/201712
http://www.nxtbook.com/nxtbooks/contract/201711
http://www.nxtbook.com/nxtbooks/contract/201710
http://www.nxtbook.com/nxtbooks/contract/201709
http://www.nxtbook.com/nxtbooks/contract/2017neocon
http://www.nxtbook.com/nxtbooks/contract/20170708
http://www.nxtbook.com/nxtbooks/contract/201706
http://www.nxtbook.com/nxtbooks/contract/201705
http://www.nxtbook.com/nxtbooks/contract/201704
http://www.nxtbook.com/nxtbooks/contract/201703
http://www.nxtbook.com/nxtbooks/contract/20170102
http://www.nxtbook.com/nxtbooks/contract/201612
http://www.nxtbook.com/nxtbooks/contract/201611
http://www.nxtbook.com/nxtbooks/contract/201610
http://www.nxtbook.com/nxtbooks/contract/201609
http://www.nxtbook.com/nxtbooks/contract/2016neocon
http://www.nxtbook.com/nxtbooks/contract/201607
http://www.nxtbook.com/nxtbooks/contract/201606
http://www.nxtbook.com/nxtbooks/contract/201605
http://www.nxtbook.com/nxtbooks/contract/201604
http://www.nxtbook.com/nxtbooks/contract/201603
http://www.nxtbook.com/nxtbooks/contract/20160102
http://www.nxtbook.com/nxtbooks/contract/201512
http://www.nxtbook.com/nxtbooks/contract/201511
http://www.nxtbook.com/nxtbooks/contract/201510
http://www.nxtbook.com/nxtbooks/contract/201509
http://www.nxtbook.com/nxtbooks/contract/20150708
http://www.nxtbook.com/nxtbooks/contract/2015neocon
http://www.nxtbook.com/nxtbooks/contract/201506
http://www.nxtbook.com/nxtbooks/contract/201505
http://www.nxtbook.com/nxtbooks/contract/201504
http://www.nxtbook.com/nxtbooks/contract/201503
http://www.nxtbook.com/nxtbooks/contract/201501
http://www.nxtbook.com/nxtbooks/contract/201412
http://www.nxtbook.com/nxtbooks/contract/201411
http://www.nxtbook.com/nxtbooks/contract/201410
http://www.nxtbook.com/nxtbooks/contract/201409
http://www.nxtbook.com/nxtbooks/contract/2014neocon
http://www.nxtbook.com/nxtbooks/contract/20140708
http://www.nxtbook.com/nxtbooks/contract/201406
http://www.nxtbook.com/nxtbooks/contract/201405
http://www.nxtbook.com/nxtbooks/contract/201404
http://www.nxtbook.com/nxtbooks/contract/201403
http://www.nxtbook.com/nxtbooks/contract/iida_red2014
http://www.nxtbook.com/nxtbooks/contract/201401
http://www.nxtbook.com/nxtbooks/nielsen/contract_201312
http://www.nxtbook.com/nxtbooks/nielsen/contract_201311
http://www.nxtbook.com/nxtbooks/nielsen/contract_201310
http://www.nxtbook.com/nxtbooks/nielsen/contract_201310_v2
http://www.nxtbook.com/nxtbooks/nielsen/contract_201309
http://www.nxtbook.com/nxtbooks/nielsen/contract_20130708
http://www.nxtbook.com/nxtbooks/nielsen/contract_20130708_neocon_supplement
http://www.nxtbook.com/nxtbooks/nielsen/contract_201306
http://www.nxtbook.com/nxtbooks/nielsen/contract_201305
http://www.nxtbook.com/nxtbooks/nielsen/contract_201304
http://www.nxtbook.com/nxtbooks/nielsen/contract_201303
http://www.nxtbook.com/nxtbooks/nielsen/contract_20130102
http://www.nxtbook.com/nxtbooks/nielsen/contract_201212
http://www.nxtbook.com/nxtbooks/nielsen/contract_201211
http://www.nxtbook.com/nxtbooks/nielsen/contract_201210
http://www.nxtbook.com/nxtbooks/nielsen/contract_201209
http://www.nxtbook.com/nxtbooks/nielsen/contract_ncw_201208
http://www.nxtbook.com/nxtbooks/nielsen/contract_201208
http://www.nxtbook.com/nxtbooks/nielsen/contract_201206
http://www.nxtbook.com/nxtbooks/nielsen/contract_201205
http://www.nxtbook.com/nxtbooks/nielsen/contract_201204
http://www.nxtbook.com/nxtbooks/nielsen/contract_201203
http://www.nxtbook.com/nxtbooks/nielsen/contract_20120102
http://www.nxtbook.com/nxtbooks/nielsen/contract_20111112
http://www.nxtbook.com/nxtbooks/nielsen/contract_201110
http://www.nxtbook.com/nxtbooks/nielsen/contract_201109
http://www.nxtbook.com/nxtbooks/nielsen/contract_2011neoconwinners
http://www.nxtbook.com/nxtbooks/nielsen/contract_201108
http://www.nxtbook.com/nxtbooks/nielsen/contract_201106
http://www.nxtbook.com/nxtbooks/nielsen/contract_201105
http://www.nxtbook.com/nxtbooks/nielsen/contract_201104
http://www.nxtbook.com/nxtbooks/nielsen/contract_201103
http://www.nxtbook.com/nxtbooks/nielsen/contract_20110102
http://www.nxtbook.com/nxtbooks/nielsen/contract_20101112
http://www.nxtbook.com/nxtbooks/nielsen/contract_201010
http://www.nxtbook.com/nxtbooks/nielsen/contract_201009
http://www.nxtbook.com/nxtbooks/nielsen/contract_20100708
http://www.nxtbook.com/nxtbooks/nielsen/contract_201006
http://www.nxtbook.com/nxtbooks/nielsen/contract_201005
http://www.nxtbook.com/nxtbooks/nielsen/contract_201004
http://www.nxtbook.com/nxtbooks/nielsen/contract_201003
http://www.nxtbook.com/nxtbooks/nielsen/contract_20100102
http://www.nxtbook.com/nxtbooks/nielsen/contract_200911
http://www.nxtbook.com/nxtbooks/nielsen/contract_200909
http://www.nxtbook.com/nxtbooks/nielsen/contract_200910
http://www.nxtbook.com/nxtbooks/nielsen/contract_200908
http://www.nxtbook.com/nxtbooks/nielsen/contract_200907
http://www.nxtbook.com/nxtbooks/nielsen/contract_200906
http://www.nxtbook.com/nxtbooks/nielsen/contract_200905
http://www.nxtbook.com/nxtbooks/nielsen/contract_200904
http://www.nxtbook.com/nxtbooks/nielsen/contract_200903
http://www.nxtbook.com/nxtbooks/nielsen/contract_200902
http://www.nxtbook.com/nxtbooks/nielsen/contract_200901
http://www.nxtbookMEDIA.com