Architecture, engineering and construction design (AEC) businesses want to operate as design professionals, not accountants where everything is about the general ledger. AEC project accounting — sometimes called job costing — is much more granular than business accounting. It’s about understanding that behind every project is a series of transactions representing the business model that encapsulates the firm.
For this reason, you need a system (whether spreadsheets or specialist software) that allows you to break work down within the project and/or all the details associated with the project — such as the project manager, the type and size of project, types of work across the project, the term of the project, and the various business units and offices involved in the project. In addition, you should be able to separate elements of a project into phases, stages and even deliverable tasks, apply these to a defined budget, and report against all of these levels.
Your system should allow you to work to your preferred business model, giving you the ability to structure fees and costs how you need to. By understanding variables such as the associated costs, unbilled work — often referred to as work in progress (WIP) — invoiced value, and the comparison to budgets, you can gain an accurate picture of the current project performance and a view of what the future performance might be.