Prepare for Slow Times – Firm and Family

Written By:
Penny Hamilton Posedly, FAIA, Past Chair of the national Practice Committee

Although many firms are busy, the newspaper warns us that slow times are ahead. If you work in housing, you feel it already. How can you lessen the effect on your firm and your family?

Pay off the credit cards. Why? If you don’t have much work, you won’t want to be paying the income you benefit to your firm or your family. Move your credit debt to a lower interest – often introductory offer – account, then pay it off as fast as you can.

· But don’t close them: In prolonged slow times, many families and firms have “lived on their credit cards”. You will want them unused but available.

Pay cash. When you don’t have enough cash on you, use your debit card.

Keep the cash-flow coming. Don’t wait 1.5 months to discover that your clients are late paying your invoice. Don’t let your invoices get 60 or 90 days out. People don’t like dealing with people they owe money to. It makes them feel guilty.

· Invoice as soon as the project merits. Don’t wait for a standard billing cycle. Bill when the project ends a phase or as soon as your contract allows.

· Learn your client’s approval and payment system. Many companies have layered approval systems. Your invoice can languish on someone’s desk unnecessarily.

· 1-week after you send the invoice. Call to see if it has been received. Ask if it is clear and if there are any questions. If not, can you approve it now to move on to the next person? “Wonderful! We appreciate your help, Sam.”

· 1-week later: “Did you receive our invoice from Sam?” “Is it clear? Do you have any questions about it?” If all is well, “When will you be cutting checks on this?” (Mark your calendar for one day after that date.) “Great. It is such a pleasure to work with you and your company, Janice.”

· Check cutting day + 1: Call their accounting department or office manager: “Janice said you’d be cutting checks about now. Do you have all the information you need on our invoice? Oh, you did it yesterday? Wonderful! It is great to deal with you; you are so efficient.”

Get those expense accounts to your accounting department quickly. Those charges need to go with the next invoice to keep the cash in your pocket and avoid paying credit card interest on them.

Supplies – mine desk drawers! Check any empty-desk drawers for pencils, pens, post-its, etc. It is amazing how you can replenish your supply cabinets with partially used items still in your office. While you are at it, ask everyone to mine their desk. Keep one of each kind of drawing tool, and so on, and turn the rest back to the cabinet. Some firms have been known to avoid buying supplies for a month or two based on the items returned to the cabinet.

Cut FedEx costs. When we’re rushed, we send many things same-day. Consider before you send, whether the recipient actually needs the item that fast. Can it wait a day? Next day or 2-days later can save your contract ½ the cost or more. Better yet, is someone from the office going over for a meeting? Hand carrying costs nothing!

Service vehicles and equipment now. In slow times, we put it off. Then if the slow times persist, we end up with repair charges. Run that car in now.

Architects tend to need a growth economy. Economies are cyclical by nature. Following these suggestions can help you, your family, and your firm through the show times.

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