Project accounting by phase: Business Central for architecture firms

Phase-based fees in Business Central for architecture firms

Design contracts split the fee across phases. These are schematic design, design development, construction documents, bidding and construction administration. Each phase is a project task with its share of the fee and a labor budget by role. You add extra services as new tasks with their own agreed fee.

You raise invoices by the share of each phase that is complete. A project architect enters that figure at month end. Business Central then works out the amount earned to date, less what you billed before. Hourly and not-to-exceed deals bill from posted time. A warning shows when the cap is close.

Consultants in Business Central for architecture firms

Much of a design fee passes to engineers and specialists. You enter their agreements as purchase orders against the project, by discipline. When a consultant sends an invoice, it matches to the order. The project then shows committed cost, invoiced cost and what remains for each discipline.

Many firms pay consultants only after the client pays. A pay-when-paid flag and a simple report link each consultant invoice to the client invoice that included it. So payables staff release payment at the right moment. Where the contract allows a markup on consultants, you set it on the task.

Staff utilization in Business Central for architecture firms

So time sheets are the raw material of project accounting in a design practice. Staff record time by project and phase each week. Cost rates come from salary bands. You can also apply an overhead multiplier. Then project profit is measured the way the profession usually measures it.

However, looking forward matters as much. Resource planning lines show who works on which project in coming periods. That reveals both overload and bench time. Studio leaders use the view to decide whether to hire, shift people between studios or bring in contract staff.

Earned revenue and backlog for architecture firms

Billing and earning are not the same thing. Business Central for architecture firms keeps them apart. You can invoice a phase ahead of the work or behind it. The project work in progress calculation compares cost or effort to date with the budget. It then posts the adjustment. So monthly statements show the revenue you actually earned.

Backlog is the fee under contract that you have not yet earned. It tells principals how much work lies ahead. Business Central works it out from contract value less earned revenue, by project and studio. Add proposals pending, and you get a realistic picture for cash planning and for talks with the firm's bank.

Reimbursable expenses and practice finance

Printing, travel, permit fees and renderings are either part of the fee or paid back by the client. Expense entries and purchase invoices carry the project and a billable flag. Reimbursables then appear on the client invoice with backup attached. You bill them at cost or with the agreed handling charge.

Beyond projects, the practice needs ordinary finance done well. That means payables, bank reconciliation, fixed assets for equipment and fit-out, budgets by studio and partner reporting. Firms with offices in several states use dimensions or separate companies. You also allocate professional liability insurance cost across studios.

Business Central for architecture firms: questions from principals

How does Business Central compare with software made for architects and engineers?

Industry packages include phase billing and utilization reports out of the box. Business Central reaches the same result through the Projects module with some setup. It also adds broader finance, integration and reporting options. We cover the trade-offs on our comparison page for Deltek. Read it, then ask us to show your own fee structure in a sandbox, so you can judge for yourself.

Can invoices follow the standard format our clients expect?

Yes. We design an invoice layout that lists each phase. It shows the fee, the share complete, the amount earned to date, the amount billed before and the current amount due. Consultants and reimbursables follow below. Public clients with their own forms can get a separate layout. We build and test each layout with your project managers before go-live.

Does it handle multipliers on labor?

Yes. You can set billing rates by role, or work them out from cost with a multiplier through resource price setup. For project profit analysis, reports apply an overhead rate to direct labor. So you can see results before and after overhead. That helps principals judge whether a fixed fee still leaves room for profit as the job runs.

Can project managers see their projects without full accounting access?

Yes. Permissions limit a project manager to project pages, time approval and reports. A role center shows their own projects with budget, actual and billing status. You can embed Power BI reports there. So they do not need to search for figures. Accounting staff keep the wider ledger access, and each person sees only what the job needs.

We also do interior design with furniture procurement. Does that fit?

It does. You handle furniture and fixtures bought for a client with purchase orders linked to the project. Client deposits work as prepayments, and you track delivery by item. The procurement fee or markup is worked out on the project, apart from design fees. That keeps design revenue and product revenue clean in your reports.

More for Business Central for architecture firms

Engineering firms share much of this setup, and their page covers the differences. The service pages explain project accounting and resource planning. The Deltek comparison helps practices that weigh an industry package. Browse them in any order. Then we can show how Business Central for architecture firms handles your phases, consultants and fees. For the product detail, see Business Central documentation on Microsoft Learn.