Practice Management Member Conversations

I am just guessing but I would think that not too many of the design professionals who reply to and read these discussions have ever heard of Robert F. Mattox, FAIA, now retired.  Mr. Mattox is the author of two (2), out-of-production volumes that were published by the AIA Press in 1978 and 1980.  The two (2) volumes are: "Financial Management for Architects" and "Standardized Accounting for Architects".  These two 'manuals' represent, not just in my opinion but in fact, the two most comprehensive, writings related to the business of architecture (and any other design profession) that have ever been published. 

I became a 'devotee' of Mr. Mattox's work in the early 1990's.  After thoroughly consuming these these volumes, i developed a financial management workshop for design professionals, titled "The Path to Profitability", which I have been presenting at the annual AIA Convention and numerous state and local component continuing education programs since 1992.

The distinction of the work of Mr. Mattox is the development of a format for the two (2), accrual, financial reports that allows for the calculation of 'true' overhead and profitability.  Unfortunately, the available, commercial  A-E software does not, in my opinion, allow for such 'true' calculations.  The reason for this, I believe, is the formatting of the chart of accounts for the financial reports, which include financial data that is superfluous and creates a distortion to accurate calculation of these important metrics. 

After my retirement in 1985 from active practice, I started my management consulting firm to assist my professional colleagues in the successful operation of their firms.  In 2006, I co-authored a book, "Financial Management for Design Professionals: The Path to Profitability."  In 2007, I led the collaboration with one of the existing A-E Software companies in the development of a customized FM software to make the Mattox formatting available to my clients.  I continue to assist my clients in the proper formatting and implementation of this customized software.

Clearly, the implementation of anything other than the Mattox format will result in a something less than the 'true' metrics for overhead and profitabilty, and also the additional other nine (9) key financial performance indicators. 

It is unfortunate that so many smaller firms are unable to afford an integrated FM/accounting software system and must rely on those that were never developed with the operations of a professional design firm in mind.  Consequently, the output reports from these packages leave a lot to be desired and offer little useful data, in my opinion.

Respectfully,
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Steve L. Wintner AIA, Emeritus
Principal
Management Consulting Services
The Woodlands TX
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Kenneth Kruger AIA, PE
Kruger Kruger Albenberg/Architects Engin
Cambridge MA
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As a small firm we were enthusiastic early users of Micro-CFMS and its successor Advantage.  However the need of and the dependency on a trained operator became not practical for a small firm. A small firm relies on just one such trained person, at least for procedures such as payroll.  Finding replacements in such a thin market, the expense of the learning curve and the occasional need of a temp substitute or replacement makes such specialized software an albatross.  Hence the advantage of a QuickBooks.  As a tradeoff, what price should one assign to great computerized metrics?  Most of them can be generated quickly by hand for the relatively few jobs such a firm sees annually.