How to Increase AEC Profitability

Review the checklist of key items your team should be considering

??Include the right contractual terms for the financials: clear definition of payment terms, make payments dependent either on clear deliverables or a specified payment plan, clearly state whether the project is fixed price or T&M, and outline how expenses will be treated.

??Establish a smooth and fast month-end process. Depending on your company’s workflow, you can potentially complete the month-end process in as little as a week by streamlining and optimizing the project lifecycle.

? Get timesheets and all project costs in immediately at the start of the month.

? Send out invoices and collect payments on time. The process starts with time and expenses, and is followed by invoicing regularly and collecting payments.

? Separate invoicing and revenue recognition, which will give you more time to evaluate the value of work in progress.

? Require project managers to evaluate progress and ensure they are accountable.

? Make sure costs are controlled from request to payment to help manage unforeseen costs.

? Perform forecasting on a monthly, rather than yearly, basis. Monthly forecasting will provide more accurate insight into revenue and resourcing.

? Check monthly reports – insight at month-end is about your income statement, utilization, working capital, and future insights in terms of revenue stream and pipeline.

? Have a proper revenue forecast and capacity overview for 4-6 months ahead to help you make the most strategic and cost-effective hiring decisions.

? Save time by integrating your project finance, complete accounting, and project management into one system.