The Dirty Little Secret They Don’t Tell You About Job Cost Accounting
Job cost accounting is the most accurate way to estimate projects. But most service professionals are working with horribly flawed figures.
Engineers must implement tools and technologies to increase and maintain their AE firms' work productivity to survive any economy.
While a booming economy can often mask inefficiencies, it's during economic downturns that the true resilience and efficiency of a business model come to the fore. Having worked in many engineering organizations, I understand that it's not about merely weathering the storm, but about harnessing its power. Thriving in any economic climate demands proactive adaptation, streamlining processes, and embracing agile, innovative tools and techniques.
This article delves into nine indispensable productivity tips designed to equip engineering firms for the present challenges and future opportunities. Whether it's rethinking email behaviors, adopting mobile-first practices, or ensuring technological tools are cutting-edge, these strategies underscore the importance of agility and foresight in the engineering domain.
Here are my tips to help you increase your productivity, grow your business into the future, and take advantage of our brave, new world.
So much of what we do in engineering is perfunctory but requires time. Too often, firms shy away from doing these things since they require effort, but yield little glory.
For example, many engineering firms commonly use spreadsheets to manage data. This is not only inefficient, but it has a high potential for inaccuracy.
Business solutions designed for your engineering process provides many automation features that are highly valuable and increase productivity metrics for everyone in the firm. For example, having important reports automatically prepared and sent to appropriate recipients on a pre-defined schedule means no one in the firm has to stop, gather data, collate it, and make it presentable. Instead, the software is taught which reports people need, when they could use it, and takes care of sending it to them via email without any human involvement.
Other workflows that firms often overlook are the ability to submit and approve vendor bills, project budgets and estimates, purchase orders, invoices, requests for time-off, timecards, and expenses. Engineering firm management software, like BQE CORE, gives you the ability to take all of these and have them reviewed by the appropriate people to ensure they are acceptable. By automating these workflows, you will become much more productive.
71% of the time businesses dedicate to administration is taken up by accounting and payment processing tasks. These include issuing invoices and chasing payments.
Manually creating, printing, and mailing invoices is a colossal waste of time and exposes you to input errors, forgotten invoices, and other costly mistakes. Stop wasting time on archaic invoicing processes and switch to digital processes.
While issuing invoices is unavoidable, manually issuing them is not. BQE CORE is one solution that assists businesses with digital invoicing.
Many engineering firms invoice their clients monthly and do this process at the end of each month. The tradition probably began because invoicing used to be a very difficult procedure requiring many hours (or days) of time from various people in the firm. It was very disruptive to the normal responsibilities of project managers and principals. Their unavailability or lack of focus would make matters worse and often delay invoicing.
Smart, time and billing software solutions like BQE CORE make the entire process of invoicing a breeze while also giving you the opportunity to automate your invoicing cycle. For example, taking half of your projects and billing them in the middle of the month allows you to spread out your cash flow rather than waiting for all your A/R to come in during one week.
This tip is really a call for planning your projects out thoughtfully. Most of you understand what tasks are to be accomplished during each stage of a project. In addition, many of you are so experienced that you simply do this without a checklist. However, just like a pilot who has flown for decades never takes off or lands without reviewing a written checklist, neither should you. This is a proven tactic for success and risk reduction.
Solutions like BQE CORE are able to give you data that will help you understand how much time is required (based on past performance) to accomplish tasks for similar projects. Use this information to build your budgets and ensure that your fees can accommodate your needs.
Having properly planned and budgeted your project means solutions will enable you to schedule your tasks with appropriate personnel and monitor their progress.
Managers should be communicating throughout the day with their team members to ensure they know what is expected, when it is due, and to reinforce accountability.
When delegating work, provide enough information so that your team members don’t need to go hunting for materials that may be required to complete the task. If what is asked requires access to a document, make sure a link to that document is included in your instructions. If a picture is worth a thousand words, attach an image to explain the issue.
As an engineering manager, fostering a culture of continuous learning empowers your staff to engage in regular training, webinars, and industry conferences, equipping them with the tools to navigate challenges more adeptly. This ongoing education for your engineering team isn't solely about acquiring new knowledge—it's about optimizing processes, employing the latest techniques, learning new metrics, and enhancing workflow. As you align with the latest industry standards and technologies, engineering leaders such as yourself can streamline your methods, reduce time-consuming errors, and achieve your objectives more swiftly. This constant evolution of skills and methodologies not only ensures the firm remains cutting-edge but also significantly boosts its day-to-day productivity. Continuous learning isn't just an educational pursuit—it's a productivity powerhouse for the forward-thinking engineering firm.
There’s a famous Latin proverb: “Verba volant, scripta manent.” This translates to “Spoken words fly away, written words remain.”
Anything from conversations with clients, consultants, and team members to tracking every hour and expense, should be written down. The benefits of time and expense tracking are clearly important from a financial budgeting, reporting, and billing perspective. But your productivity will also increase and you’ll see continuous improvement when you document much, much more.
Some of you may pride yourself on your memory, but there will be a time when it conflicts with the memory of the other party. Having contemporaneous notes can save you countless hours, headaches, and attorney fees.
Every time you document something, use it as an opportunity to reevaluate your project plan. For example, it may also result in a change-order to your client, which could obviate the need to write-off valuable time you spent, which may bring value to the client but not your firm.
Many people live-and-breath through email, but this is detrimental to your productivity. Email is a tool that makes you lose control of your day. All the things you planned to accomplish will be waylaid the moment you look at your inbox.
I recommend you don’t open your email until you’ve completed at least two hours of work. I personally don't open email until 11 am and then again at 3 pm. This gives me large enough chunks of time in the day to accomplish what is at the top of my priority list for the day. Let your team know, if something is urgent, to use text or phone to reach you immediately.
Create your own priority mailboxes. After scanning through your emails, place them in the mailbox that represents the priority. For example, create three mailboxes: “High Priority,” “Medium Priority,” and “Low Priority”. After reading an email (or simply the subject line and sender), move it into one of these mailboxes for later when you can give it more attention.
When it comes to measuring productivity, one of the best strategies is to gather your team first thing each morning. If they’re remote, have them call in. Then, go around the room, and give everyone one to two minutes to discuss what is on their to-do list for the day and what is needed from any other team member to help them complete their tasks. For most teams, this meeting provides two benefits for your teams.
First, it visually brings the team together, because often we have teams that are working remotely in the field. This helps reinforce your team culture, which is at risk when your workers are temporarily or permanently distributed.
The second benefit is that it forces each employee to think about what they plan to accomplish each day and verbalize this to the team. This builds accountability, which was more easily overlooked when we worked in physical proximity. People could “look” busy but not really make progress. Having people state their objectives for the day and turning that into habit guarantees better team performance and productivity. In addition, having a shared document that everyone can see keeps everyone accountable.
Regular updates to both hardware and software tools ensure that your productivity team has access to better products and the most advanced capabilities and new features, reducing bottlenecks and inefficiencies inherent in outdated systems. When you operate with the most current data-driven dashboards and tools, tasks that once took hours can be completed in a fraction of the time, and the potential for errors is significantly diminished. Plus, ensuring that employees are well-trained to harness these high-quality tools effectively means less time grappling with technical glitches and more time innovating and problem-solving.
Think of productivity like an architect or an engineer. Clearly, we recognize the importance of planning. Before a shovel hits the dirt, months or years of planning have gone into the project to ensure that the construction phase goes as smoothly as possible.
We live in a fractal universe: the same attributes must be applied at every level. Plan every aspect of your firm. Plan every detail of your project and plan how you utilize your resources (employees). Once you do this, your firm (like your projects) will be sustainable, resilient, and beautiful.
Learn more about how BQE CORE is built for engineers by engineers to create the perfect project management tool.
Steven Burns, FAIA, is a renowned global thought leader, architect, and highly sought-after speaker on topics related to emerging technologies and effective firm management. As the founder of The Well-Designed Firm, a cutting-edge business consultancy, Steven is committed to helping A/E firms elevate their business practices to the same level of elegance as the architecture they create. With a Master of Architecture degree from the prestigious Harvard Graduate School of Design and over 7 years of experience at SOM, Steven is a true expert in his field. He also founded his own architecture firm, BBA Architects, which he successfully sold in 2007. Steven's contributions to the architecture industry go beyond his work as an architect and business consultant. He is also the mastermind behind ArchiOffice, a popular project and office management software that he developed and later sold to BQE Software in 2010.
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