Engineering & Architectural Firms
Project timelines stretch across months. Revenue recognition, job costing, and cash flow don't align the way they do in other businesses.
The Industry
A structural engineering firm starts a commercial project in January. The design phase runs heavy through February and March with senior engineers putting in serious hours. But the billing schedule calls for 20% at kickoff and 30% at schematic design approval in April. By March, you’ve done most of the technical work but collected a fraction of the project fee. Your financials show a loss in Q1 and a windfall in Q2, even though the actual work happened the other way around.
Architectural and engineering practices live in this timing mismatch constantly. You front-load expertise on a project but bill on milestones that lag the effort. Staff utilization fluctuates as projects ramp up and wind down. Principals spend hours on proposals and business development that never get billed anywhere. Software subscriptions for CAD, BIM, and engineering analysis tools run thousands per month regardless of project load. The business model creates accounting complexity that standard bookkeeping approaches don’t handle well.
Who This Covers
Who This Covers
Civil engineering firms, structural engineers, MEP consultants, architectural practices, landscape architects, design studios. Any project-based professional firm in the Treasure Valley billing hourly, fixed fee, or percentage of construction cost for design and consulting work.
What Makes It Complex
What Makes It Complex
Project timelines spanning months or years. Progress billing that doesn’t match work performed. Retainage held by clients after project completion. Change orders that need separate tracking. High fixed overhead including software, insurance, and professional licensing. Utilization rates that determine whether you’re actually making money on your staff.
What We Handle
Project accounting means tracking every hour and expense by job so you can see what each engagement actually costs. Revenue recognition follows the work, not just when invoices go out. Work-in-progress tracking shows where you stand on active projects and how much unbilled time has accumulated. Retainage gets recorded as a receivable and tracked until the client releases it, sometimes months after you’ve finished your scope.
Professional overhead gets categorized properly. Licensing fees, continuing education, professional liability insurance, and those expensive software subscriptions are all required costs of operating your practice. Tax preparation needs someone who understands how project-based billing affects income timing and how to handle WIP for tax purposes. Our Enrolled Agents prepare returns that capture these expenses correctly and represent you before the IRS if questions arise.
Project Financial Tracking
Project Financial Tracking
Job costing by project capturing labor hours and direct expenses. Work-in-progress reporting showing unbilled time by engagement. Progress billing tracked against project budgets. Retainage recorded and aged until collection. Change order accounting keeping additional scope separate from original contract. QuickBooks set up for project-based reporting that shows profitability by job.
Professional Expenses and Tax Support
Professional Expenses and Tax Support
Overhead tracking for software subscriptions, professional insurance, licensing, and continuing education. Payroll for staff with proper withholding and deposits. Contractor 1099s for specialists brought onto projects. Tax returns prepared by Enrolled Agents who understand project-based professional services. Quarterly estimates calculated around project timing rather than guesswork.
What Goes Wrong
Most firms track direct labor against projects but ignore overhead allocation. A project shows $40,000 in labor cost and $65,000 billed, looking like a 38% margin. But nobody allocates the rent, the software, the E&O premium, or the admin support. When you actually load in overhead, that 38% becomes 14%. You bid the next similar project at the same rates thinking you’re doing well.
Unbilled work accumulates quietly. An engineer spends four hours coordinating with the contractor on a question that wasn’t in scope, but nobody creates a change order. A principal reviews drawings on a Saturday and doesn’t log the time. Over a year, this adds up to thousands in work performed but never invoiced. Retainage sits on the books for months after project closeout because nobody follows up. Cash flow gaps during slow billing cycles force the firm to scramble even when the project backlog looks healthy.
Hidden Overhead Destroys Margins
Hidden Overhead Destroys Margins
Direct labor tracked but overhead never allocated. Software subscriptions, insurance, and office costs treated as general expenses instead of project costs. What looks like a profitable engagement turns out to break even or lose money. Bidding stays based on labor rates without accounting for the real cost of delivery.
Revenue Never Makes It to the Bank
Revenue Never Makes It to the Bank
Unbilled coordination time that should be change orders. Hours worked but not logged. Retainage that ages indefinitely because collection falls off the radar after project delivery. Work done in Q1 that doesn’t turn into cash until Q3 or later, creating operational strain even when you have plenty of projects.
What Changes
Project profitability becomes visible with overhead included. You know which types of projects and which clients actually generate margin after all costs are loaded. Bidding decisions come from real data on what similar past work actually cost to deliver. Unbilled time gets caught before it ages too long. Retainage gets tracked with follow-up dates so it doesn’t sit forgotten.
Monthly financial statements reflect actual performance, not just billing cycle timing. WIP reporting shows where you stand across all active projects. Tax returns get prepared by Enrolled Agents familiar with how engineering and architectural practices operate, capturing every deduction for professional expenses and handling project-based revenue correctly. Quarterly estimates account for your actual billing patterns so April doesn’t bring surprises.
Decisions Based on Real Numbers
Decisions Based on Real Numbers
True project profitability including overhead allocation. Historical data showing what project types and client relationships pay well. Bidding based on what work actually costs to deliver. Stop taking on projects that tie up your best people for inadequate fees. Focus resources on the engagements that drive the business forward.
Books That Work and Taxes That Don't Surprise
Books That Work and Taxes That Don't Surprise
Monthly closes and WIP reports you can rely on. Receivables including retainage tracked and collected systematically. Tax preparation by Enrolled Agents who can represent you directly before the IRS when needed. Professional overhead captured correctly. Quarterly estimates that prevent year-end cash crunches. You run the practice while we handle the numbers.
The Treasure Valley's Tax and Accounting Team
The Next Step:
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