Leadership team in a meeting

The metrics we track will improve, but what should we focus on? Leading architects target client satisfaction and several benchmarks of profitability.[1]

We'll skip over generic issues like cash flow, which your accounting team should handle independently.

1. Client satisfaction

Word of mouth drives revenue and growth for architects[2], but how do you go above and beyond?

Clients want to be in the loop, so transparency in the design and billing of the project is paramount. They want to see that the architect is in their corner and proactive in keeping the project on track. In particular, change orders during construction are very frustrating for clients, so manage the construction and close-out phases like a hawk.

StageProject virtually guarantees contractual and billing clarity for all parties, giving clients access to their agreements, project stages, design changes and amounts, monthly reports, billing history (and current position), renderings, and photos.

2. Profitability

While top-line profitability matters most, top performers drill down to see which components[3] can be improved.

  1. The Profit/Revenue Ratio is the definitive measure of how effectively a firm delivers projects, so it's critical to any firm's financial viability.
  2. Overhead Rate - are overheads in a healthy range relative to revenue-generating expenditures?
  3. Utilization Rate - how focused are we on revenue-generating activity? Balance this measure because while a high utilization rate indicates efficiency, it predicts burnout.
  4. Net Multiplier (ROI) - do we get a healthy return on investment from our project teams?
  5. Break-even Rate - what is the minimum revenue we must generate?
  6. Project Backlog - should we be hiring?
  7. Pending Proposals - are we on track to win new projects?

3. Individual Project Metrics

Notice that §2.1 above Profit/Revenue Ratio also applies to individual projects and is the KPI we track to gauge each project's contribution to our bottom line.

StageProject graphically indicates the profit margin in real-time for every project, enabling leaders, the contracts team, and PMs to work together to catch issues early and improve profitability over time.

StageProject's cloud solution delivers unparalleled contractual transparency and helps make projects more profitable.

Lead your industry with cutting-edge processes and tools? Request a Demo or try StageProject™ on your next project.

            1. https://monograph.com/blog/2021-best-practice-report-architecture-statistics
            2. https://www.architectmagazine.com/practice/best-practices/dont-forget-architecture-is-a-service-industry_o
            3. https://www.linkedin.com/pulse/15-crucial-financial-metrics-architectural-firms-dr-benjamin-coorey

/  Further Reading  /

Growing an Architectural Firm
Futuristic Architecture - Dark

Maintaining agility and transparency as your organization scales up.

Essential Metrics for Architects
Leadership team in a meeting

Fundamental metrics that architects should use to measure the success of their firm and projects.

Design Change Management Done Right
Project team in a meeting

Boost project efficiency and profitability by handling design changes better.

Turn design change management into a core competence.

Why PMs Should Lead Project Billing
Project team in a meeting

Telltale signs of a suboptimal contract management workflow.

Rethinking Contract Management
Crossing a project minefield

Does your firm's contract management and project billing workflow feel like crossing a minefield?

Do you Recognize these Challenges?
Subcontractor invoice approval

Wishing you could spend more time working on the things you love, instead of routine billing and contractual details? You'll recognize some of the challenges highlighted here.

Contract Intelligence™ Framework
Reimagined in Edmonton

Optimizing the intersection between project management and contract management could be a source of significant untapped potential.

Reimagined in Edmonton
Reimagined in Edmonton

How, Why and Where : the brainchild of an award-winning Edmonton architectural firm.

Not Another Document Workflow System
Document Workflow System

Who thinks that the hard part of contract management is document storage, document sharing, and electronic signatures?

Introducing StageProject™
Introducing StageProject

StageProject® launched for public consumption in January 2021.

Supporting unlimited users and priced per active project, it's lean and will grow with you. Try it on your next project and see how it revolutionizes your contracts and billing workflows.

Contract Management Demystified
Contract management demystified

Undertaking complex projects involving multiple stages, contractors, clients, or all of the above, contract management is the task of negotiating and managing the terms of each relationship favourably.

For success, agreements between parties require exceptional clarity about deliverables, deadlines, rewards, and penalties.

Invoice Inbox Zero
Contract management demystified

In a medium-sized firm where I once worked, senior partners would meet with their bookkeeper to process the incoming pile of invoices that had arrived in the preceding month.

Staying on Top of Project Billing

Invoicing clients and approving invoices from subcontractors is essential but routine, detail- oriented, and time-consuming. Challenges include incoming invoices that do not align properly with contractual milestones. For client invoicing, issues include billing on time, including contractor bills, missed billing opportunities, and compiling good- looking progress reports.

StageProject™ Deep Dive
the stageproject system

StageProject streamlines contract management and billing for projects with multiple stages and sub-consultants. It's helps approve invoices, client billing and reporting, and managing design changes.