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Why Architecture and Engineering Firms are Struggling to Invoice Using QuickBooks

QuickBooks is a generic accounting software that is popular with most businesses. However, because of the detailed invoicing by the A/E industry, other software should be used.


QuickBooks is a popular accounting software that many businesses, including architecture and engineering firms, use for billing and financial management. However, A/E firms may find that certain features or elements don't fully meet their unique billing requirements. 

Here are some potential areas where A/E firms might find QuickBooks lacking for their billing requirements: 

Project-Based Billing 

Architecture and engineering firms often work on projects with complex billing structures, including progress-based billing, retainer billing, and milestone-based billing. Since QuickBooks was primarily designed for generic business accounting needs, it lacks specialized tools for managing these intricate billing methods effectively.  

Because of these missing features, firms often find themselves looking for workarounds. Common makeshift solutions involve using external applications like Microsoft Word or Excel to draft invoices or track project financials. While these tools are powerful in their own right, using them for accounting can be tedious and leave room for errors.  

Manual entry or the transfer of data between applications opens up a wide range of possibilities for human error. An omitted entry, a mistyped number, or a misplaced decimal point in Word or Excel can lead to incorrect billing which can result in disputes with clients. Resolving these issues consumes valuable time and resources. 

Change Order Management 

Architectural and engineering projects frequently involve change orders due to design modifications. QuickBooks doesn't have a dedicated module that focuses on change order management. This lack of a structured system means firms often struggle to input and track change orders directly in the software. This means teams are often left to devise their own methods using the available features of QuickBooks. This might include using general notes sections or other non-specific fields to document change orders. These workarounds can be less intuitive and might not capture the full scope and impact of a change order.  

A change order can significantly impact project budgets and timelines. Without detailed tracking capabilities, firms may find it challenging to assess the financial implications of a change order. This lack of insight can lead to budget overruns and project delays. 

Efficient change order management requires streamlined approval processes. Without a built-in workflow to route change orders to the necessary parties for review and approval, processes can become cumbersome and delayed. 

Effective change order management also requires clear communication among stakeholders, including clients, contractors, and internal team members. QuickBooks doesn't offer specialized collaboration tools tailored to the A/E industry, making it harder to maintain transparent and efficient communication. 

Progress Invoicing 

For projects that are billed based on the percentage of completion, QuickBooks might not provide intuitive tools for tracking project progress and generating corresponding invoices. This can be felt especially when trying to correlate detailed project milestones with their respective billing percentages.  

As a result, architects and engineers can find themselves resorting to manual methods to calculate and input the relevant data. This not only introduces the risk of errors but also consumes additional time and resources. Firms that rely heavily on progress invoicing might need to consider additional tools or software that specialize in this area to ensure accuracy and efficiency in their billing process. 

Detailed Invoicing 

A/E firms might need to provide detailed invoices that break down costs for different aspects of a project, including design, engineering, and sub consultant fees. QuickBooks lacks customizable invoice templates for such detailed billing so firms may need to resort to workarounds. This could involve manipulating existing templates beyond their intended use or even integrating third-party applications to create suitable invoices. These workarounds can be clunky and error-prone. 

Even if a firm manages to tailor an invoice template within QuickBooks to its needs, repeating this customization for every project can be tedious. This manual intervention can divert significant time and resources away from actual project work, affecting overall efficiency. 

Inaccurate or unclear invoices can have even wider effects. Clients may challenge these bills, leading to disputes. This can delay payments, affecting the firm's cash flow.  

Integration with Project Management Tools 

A/E firms commonly use project management software to track project progress and details. QuickBooks, especially in its more basic versions, may not offer direct, native integrations with several of the popular project management tools that A/E firms rely on. This means firms have to either use third-party connectors or rely on manual data transfers. 

Even when integration solutions exist, they might not provide seamless real-time data syncing. Delays or inconsistencies between the project management tool and QuickBooks can lead to out-of-date information being accessed, which might cause scheduling or budgeting issues. With manual data transfers, there's always the risk of data loss or duplication. This not only complicates the project's financial tracking but can also lead to inaccuracies in billing, expenses, and revenue forecasts. 

Relying on third-party connectors or additional software to bridge the gap between QuickBooks and project management tools can introduce added costs. These expenses can add up over time, especially for larger firms with multiple projects running simultaneously. 

Effective project management in A/E firms requires collaboration between various departments, from designers to accountants. The potential disjointedness between QuickBooks and project management tools can make it harder to maintain a unified view of the project, hampering collaboration. 

Advanced Reporting for Invoicing 

Architecture and engineering firms might need specialized reports that provide insights into invoice aging, outstanding balances, and project-specific billing analysis. QuickBooks primarily offers generic reporting templates. These might not be tailored to the specific requirements of A/E invoicing, which often needs a more granular and project-focused breakdown. 

A/E projects often consist of multiple phases, from preliminary designs to final approvals. QuickBooks might not provide reports that clearly segregate invoicing data by these specific project phases. 

A/E professionals also often rely on visual data representations, such as Gantt charts, for a clearer understanding of project timelines and invoicing. QuickBooks might lack these industry-specific visual reporting tools. 

While it's possible to generate custom reports in QuickBooks, the process can be time-consuming and might require expertise. A/E firms might find this process inefficient, especially when generating reports for multiple projects. 

Why A/E Firms Should Use BQE CORE for Billing and Invoicing 

BQE CORE was created by an architect and an engineer to address the challenges they encountered while running their own firms. The all-in-one platform consists of project management, time and expense tracking, billing and invoicing, reporting and analytics, CRM, HR, and more. BQE CORE integrates project management features with billing, allowing architecture and engineering firms to seamlessly translate project progress and time entries into accurate invoices. 

Designed to Handle Multiple Billing Types 

BQE CORE allows architecture and engineering firms to set up custom billing arrangements for each project, accommodating different billing methods such as fixed fee, hourly rates, and percentage of completion. The software's intuitive interface and automated tools make it straightforward to set up, track, and invoice for each progress billing stage. By providing real-time visibility into project financials and streamlining the billing process, BQE CORE not only reduces administrative burdens but also enhances the accuracy and professionalism of invoicing, making it a preferred choice for firms with complex billing requirements. 

Customizable Detailed Invoicing 

BQE CORE facilitates the creation of detailed invoices that meticulously break down costs across various project facets—whether it's design, engineering, or sub consultant fees. Its user-friendly interface allows architects and engineers to itemize services, materials, and other costs, ensuring clients have a comprehensive understanding of the charges. It also has customizable templates and automated tracking tools that make it a breeze to capture and present all billable items.   

Built in Change Order Management System 

BQE CORE also helps architecture and engineering firms manage change orders by incorporating them into the billing process, making it easier to adjust invoices as project scope evolves. Architects and engineers can easily document, track, and bill for changes, ensuring that both project scopes and associated costs are always aligned. The platform fosters transparent communication with clients, presenting change orders in an organized manner and facilitating swift approvals. By automating and centralizing this process, BQE CORE minimizes disruptions, reduces the risk of oversight, and ensures that firms are adequately compensated for all project modifications.   

Advanced Reporting Capabilities 

BQE CORE offers advanced reporting capabilities that provide insights into billing performance, invoice aging, revenue analysis, and more, enabling informed decision-making. Through its intuitive dashboard and analytical tools, firms can assess invoice aging, helping in identifying potential cash flow bottlenecks and ensuring prompt client follow-ups. The revenue analysis feature paints a comprehensive picture of both past revenue streams and future forecasts, enabling firms to identify growth areas and potential pitfalls. Its interactive visual representations and customizable report templates make data interpretation straightforward, ensuring that decision-makers have all the information they need at their fingertips. 

Book Your Free BQE CORE Demo

In a rapidly evolving architectural and engineering landscape, firms must prioritize financial accuracy and operational efficiency.

QuickBooks, while robust for general accounting needs, may pose certain limitations for A/E-specific requirements. This necessitates the search for solutions that align more closely with the industry's unique billing and invoicing intricacies.

BQE CORE emerges as a comprehensive alternative, meticulously designed to bridge the gaps faced by A/E professionals in QuickBooks. With its capability to manage complex billing structures, detailed invoicing, change order management, and advanced reporting, BQE CORE not only simplifies the administrative process but also fortifies the financial foundation of A/E firms.

 

Try a free demo of BQE CORE today!

 

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