Preparing Your Project Accounting Systems for Year-End: Don’t Wait
For architecture and engineering (A&E) firms, year-end can sneak up fast—especially when projects are still in motion. Waiting until December to address your project accounting processes can lead to missed revenue, poor reporting, and a stressful close. The smartest firms start preparing early, reviewing both project-level data and firm-wide financials before the fourth quarter ends. Here’s how to do it right.
1. Don’t Wait for Final Invoices to Review Projects Instead of waiting until the final invoice is out, start reviewing projects now. Look at budget vs. actuals, logged hours, billing completeness, and remaining scope. Are there discrepancies between work completed and what’s been invoiced? Are project managers working from current data? Early reviews catch errors while there’s still time to fix them.
2. Reconcile Work-in-Progress (WIP) Reports WIP reporting is essential for A&E firms tracking earned revenue. At year-end, WIP reports help determine what has been delivered versus what has been billed. Clean WIP data supports:
- Accurate revenue recognition
- Improved project margin analysis
- Timely, accurate invoicing If you haven’t looked at WIP since Q2, now’s the time.
3. Clean Up Time Tracking and Payroll Data Time entries fuel project accounting. But at many firms, time logs go unchecked until it’s too late. Review timesheets weekly, reconcile them with project phases, and ensure payroll data is accurate. Clean time data ensures labor costs align with budgets—and helps prevent billing delays.
4. Review Budget Variances Firm-Wide Don’t just look at financials by project—look across your whole firm. Are certain types of projects consistently going over budget? Are there patterns in where you’re losing margin? Year-end is the perfect time to run variance reports and use those insights to inform next year’s pricing, planning, and staffing decisions.
5. Start Your January Setup Now Year-end isn’t just about closing books—it’s about preparing for the next year. Create new project templates, clean your chart of accounts, and archive completed jobs. If you’re switching tools (or finally integrating systems like Monograph and QuickBooks), start now. Don’t let cleanup spill into Q1.
Conclusion: For A&E firms, project accounting isn’t a task you tackle once a year—but year-end is when it matters most. Proactive reviews, clean data, and aligned systems set the stage for smoother closes and smarter planning. Summit Business Advisors works with firms to prepare early and close confidently. Need help getting started? Let’s talk.