Professional services organisations have a lot to keep track of. Billable hours, employee bonuses, and accounts receivable are just the beginning. Bookkeeping for architects is a big job. Many firms assume they need to hire someone full-time to manage their books. But there may be a better alternative.
Architecture firms can outsource their bookkeeping to an online bookkeeping service that is ready to hit the ground running. Partner with someone who knows about architecture firms’ unique needs and can nail a balance sheet to boot.
Read on to learn more about how outsourced bookkeeping can help your firm keep your reports accurate and current.
How Outsourcing Bookkeeping Can Benefit Architecture Firms
You want to keep your financial records ready for inspection — whether by the ATO or a potential investor. Why pour hours of your leaders’ time into this task when you can outsource it?
Advancing your bookkeeping strategy is a whole lot easier if you have a dedicated bookkeeper on call. This helps your human resources staff remain dedicated to hiring and company culture, leaving payroll and benefits management to your financial expert. Plus, your executives never have to fret about reconciling bank accounts or tracking down late invoices.
Here are some of the reasons an outsourced team with experience with businesses like yours can change your entire financial picture for the better.
Outsourcing your books may lead to faster payments
Is there anything worse than phoning your clients again and again to ask for a payment? It’s awkward and frustrating. As an architecture firm, you’re likely billing by project. You need the cheque to close out the billable hours on your end. The more you’re chasing money, the more money you continue to waste!
An outsourced accounts receivable team can streamline the payment process to make it easier for your clients to pay. They may also send out routine reminders that encourage your clients to submit payment.
An experienced bookkeeper will also be on top of your team’s time tracking, to make sure you are always billing correct amount. Double-entry bookkeeping helps your financial team catch errors early and avoid billing mistakes.
Getting help lets you focus on your business
You may be spending more time and resources on your finances than you realise. As your firm grows, it will become untenable to do your own books. One-in-three small businesses say they spend at least 80 hours per year on lodging their taxes alone! Another 13% of surveyed businesses say they spend more than 10 hours per month on payroll taxes. Imagine what you could be doing with your time if you leave financial management to a trusted outsourced team.
Using a virtual bookkeeping keeps your firm financially healthy
Understanding your cash flow keeps you in the loop about your overall financial health. If your books are a month behind, you could be moving toward insolvency and not even realise it. A dedicated virtual bookkeeper will contact you when they spot any red flags or a negative trend in your cash flow. This is invaluable.
Know Your Numbers to Maintain Your Architecture Business
There are many reasons for insolvency in any business. According to the Australian Securities and Investments Commission, however, there are some common trends for business collapse. The most recent data is about businesses that became insolvent between 2018-2019.
ASIC says the top three reasons for a business to fail, according to data about recently closed organisations, are:
- Inadequate cash flow
- Poor strategic management of the business
- Significant trading losses
Of those three reasons for lodging insolvency, cash flow was reported in 51% of all cases of business collapse. In other words, if an architecture firm has high spending and not enough client funds coming in — you could go under. Having a dedicated off-site bookkeeper can help you identify when you’re spending too much. A virtual CFO can even offer insights and strategy about how to get back on track.
It’s worth noting that architecture firms and other professional services are not among the top three industries to have collapsed in the ASIC report. Still, knowing your numbers allows you to improve your business practices and make smarter investments.
The final word
Bookkeeping for architects is a specialised practice. If you outsource your financial needs to someone familiar with project-based accounting in the professional services industry, you’re a step ahead of other firms.