Working in Architecture & Engineering Accounting, I’ve seen this one question keep firm owners up at night: “How much are we leaving on the table?”
The answer is usually… a lot.
Tracked poorly, time and expenses bleed through the cracks. Tracked well, they can drive smarter project decisions, tighter billing, and real growth.
Let’s dive into what actually works—and why sloppy tracking is no longer an option for A&E firms.
Skipping this stuff isn’t just bad accounting. It’s bad business.
Time & Expense Tracking: The Hidden Engine of Profitability
Every hour your team spends matters.
Billable hours are the oxygen of architecture and engineering firms. That’s no exaggeration.
But most shops don’t realize how fast they’re hemorrhaging revenue just by not capturing time accurately—responding to RFIs, hopping on client calls, sketching during construction admin. It’s all billable... yet gone forever if not logged.
I used to work with a Denver-based landscape firm who billed ~3,000 hours a month. There was one senior associate who never logged client phone calls. Ever. We did the math—it was costing the firm over $25,000 a year.
Multiply that across your team. That’s real money, real fast.
Here’s why tracking time and expenses can’t be an afterthought:
- Untracked billable time kills profit margins.
- It prevents accurate job costing and erodes quoting confidence.
- When time tracking is inaccurate, invoicing slows and WIP reporting breaks down completely.
And on that last point, yes—clients notice if your invoices feel “off.” Trust evaporates.
Even worse, if your firm works on DOT or other government contracts, you’re held to DCAA-level standards. That means audit-ready records—not just guessing on time sheets.
Bottom line: what doesn’t get tracked doesn’t get billed, and what doesn’t get billed blows up your margins.
Tip: Don’t just track time. Track it by phase, by role, by task. That’s where the insight lives.
Billable vs. Non-Billable Time: Two Sides of Your Profit Equation
Not all hours are equal.
A 40-hour week doesn’t mean 40 hours of revenue. The profit levers come from separating billable from non-billable—and acting on that data.
- Billable Hours: Design time, dev meetings, site visits, drawing revisions. These feed invoices.
- Non-Billable Hours: Internal review, staff meetings, proposal writing, business development.
Tracking both isn’t just about good bookkeeping. It’s about seeing where your team’s effort really goes.
When you realize that only 60% of your team's time is being billed, you start asking real questions:
- Are we pricing projects too low?
- Are we over-investing in internal admin?
- Why is our highest-paid principal spending 10 hours a week on Scheduling?
This kind of transparency helps firms set the right boundaries—with clients and internally.
The takeaway: Accurate time tracking is your best lens into where money is made (and where it isn’t).
Manual Time Tracking? It’s a Productivity Tax
Let’s be real—if you’re logging time in spreadsheets by Friday afternoon, you’ve already lost.
Manual methods are killing efficiency (and patience). And in small firms, they guarantee someone loses their weekend cobbling together timesheets from memory.
Common pitfalls I’ve seen that quietly drain profit:
- Multiple disconnected spreadsheets or manual logs
- Time entered days later—if entered at all
- Formatting issues that break formulas or confuse staff
- Admin hours spent chasing down staff for their logs
Worst part? These old methods don’t scale beyond three or four people. No oversight, no regulation, and certainly no compliance.
If you’re dealing with state or federal clients, and ever face an audit, unreliable data trails become a serious liability.
Pro Tip: Automate it. The hour it takes to move to structured digital tracking will pay for itself within the month.
How Do A&E Firms Track Billable Time Accurately Without Disrupting Their Flow?
When I bring up “time tracking,” most architects groan.
“I don’t want another tool."
But that’s the thing—good time tracking doesn’t slow people down. It moves silently in the background, adapting to how people already work.
There are three killer features I always recommend A&E firms prioritize:
1. Real-Time Stopwatch Tracking
You’d be surprised how much time goes missed just from context switching.
Designers might juggle between Revit, SketchUp, and email dozens of times in a day. Real-time stopwatches let them log time by project with a single tap, without stopping their flow.
- Set timers when tasks begin, pause them during interruptions
- Toggle between projects if you wear multiple hats
- Sync timers across phone and desktop so time lost on job sites is still captured
2. Automated Time Capture (Set It and Forget It)
The best systems now run AI-based “memory” in the background—building a timeline based on app usage, document names, and browser tabs.
It’s private, secure, and removes the mental overhead of remembering what you worked on at 3 p.m. Tuesday.
More importantly, it removes judgment. People aren’t guessing or inflating. Just accurate logs, hands-free.
3. Tracking by Phase and Role
A single project might span months and multiple design stages—from pre-design to construction admin.
Tracking by project phase gives visibility into:
- Where the bulk of the cost is going
- Who’s spending time where
- What phases generate the most margin
Pair that with role-based data (e.g. intern vs. senior architect), and you’ve got clarity at both the operational and financial levels.
If your time logs aren’t tied to these parameters, you’re missing the real story.
Integrate Time Tracking With Project Planning or Kiss Productivity Goodbye
If your Gantt charts say one thing and your timesheets say another, good luck managing the budget.
Time tracking must connect directly to your project timelines.
The best firms pipe time data straight into workload projections and budget dashboards.
This tight coupling gives you real-time views of:
- Who’s logging time on which project vs. who’s overcommitted
- Budget burn-up vs. project completion percentage
- Forecasts of earned value vs. actual costs
In one Seattle firm I consulted, we found two junior engineers doubling time on the same phase due to poor coordination. $12,000 in overages—solved instantly once time was tied to scheduling.
Here’s what tight integration really looks like:
- Calendar-based scheduling that shows team availability at a glance
- Drag-and-drop rescheduling to balance workloads
- Instant visibility into task progress and budget impact
Takeaway: If time and planning are separate, you’re flying blind.
Remote and Field Work? No Problem When It’s Mobile-First
Architects aren’t chained to desks. They’re in job trailers, walking surveys, solving issues in real-time—all of which can be billable.
That’s why mobile accessibility isn’t a luxury—it’s mandatory.
Without mobile time and expense tracking:
- Site visits go unlogged
- Paper receipts get lost
- Follow-up reports lack proper documentation
With a solid mobile-friendly platform, teams in the field can:
- Start timers or log tasks with a single tap
- Snap photos of receipts and upload instantly to the expense log
- Automatically sync data back to the accounting system
I had a client outside Phoenix with six active job sites. Their PMs took photos of gas receipts and uploaded them before they even pulled out of the job site. No more lost expenses. Zero unbillable reimbursables. Simple stuff, huge impact.
Support Complex Billing Structures with Flexible Rate Tables
Not every hour is equal.
A principal’s time might be worth triple that of an intern. And yet, many firms apply flat rates or try to “blend” billing for simplicity.
That’s a mistake—especially in proposals tied to government rates or state DOT-approved schedules.
A solid time tracking system should:
- Let you assign different billable rates per role, experience, or discipline
- Automatically apply correct rates for each entry
- Track time by subcontractor and show exact reimbursables
When this is connected to invoicing, guess what happens? Clean bills. No revenue gaps. No client disputes.
Best of all, it speeds up collections. Clients pay faster when they see precisely what they’re paying for.
The Right Tools Make Expense Tracking a No-Brainer
Expenses are just as critical as time—especially if you're passing through reimbursables or handling subconsultants.
Here’s how top-performing A&E firms keep expense tracking accurate without killing momentum:
- Log expenses immediately: Whether it’s a lunch receipt or a site purchase, it gets recorded on the spot.
- Attach proof: Mobile uploads let staff snap photos of receipts and categorize by project.
- Batch export: When it’s time to invoice, expenses are already sorted and attached. One click.
Trying to match expenses through email threads, paper notes, or random credit card logs? That’s how things slip through.
Eventually, you beg your admin to hunt down three month-old Uber rides for client meetings. It’s not a good use of anyone’s time.
Let’s close here for now…
What we’ve covered is only half the picture. In the next part, we’ll dig into full expense workflows, subconsultant tracking, financial reporting, and how the right tech makes it all sing together.
Hang tight—because the second half is where the true business impact shows up.
Related Resources
- How InVantage3 Helps Architecture Firms Balance Creativity with Financial Clarity
- A&E Bookkeeping Services in Bellevue
The Silent Expense Killer: Subconsultants and Reimbursables That Drain Margins
You can be running a perfectly efficient internal operation—and still watch profits leak because of one thing: poor expense tracking on subs and pass-through costs.
Let me tell you how this usually goes wrong.
A firm I worked with in Portland was handling a transportation project that required multiple geotech and civil subconsultants. The issue? Every month, different PMs were forwarding PDFs of sub invoices to the bookkeeper—without tying them to their phases, roles, or even correct job codes.
End result? Pass-through expenses were underbilled by thousands, the client didn’t reimburse fully, and the firm ate the difference.
Here's what a tight reimbursables workflow needs to look like:
- Digital upload of sub invoices with keyword tagging by project and phase.
- Approval workflows that catch overages before they hit your books.
- Auto-linked expenses that flow straight into invoicing packages.
Add to that mobile receipt uploads for things like travel, printing, or materials—and suddenly there's no excuse for this money to slip through the cracks.
If you're not tracking subconsultant expenses at the same detail level as internal labor, you're setting up an accounts receivable nightmare.
Quick win: Make "attach a PDF/photo of every expense" a non-negotiable policy. Combine that with expense categories mapped to your chart of accounts—and thank me later at invoicing time.
Where Most Firms Struggle: Real-Time Visibility
Time and expenses are great… but only if you get visibility before the invoice goes out.
The lag kills profitability.
You need to know, day by day:
- Which projects are bleeding hours
- Which team members are booked (or burning out)
- Which phases are pushing up against budget caps
That's where real-time project dashboards come in (https://www.deltek.com/en/architecture-and-engineering/architecture-software/time-tracking). I’m not talking about some clunky spreadsheet with color-coded cells. I mean live, interactive reports that show:
- Budget used vs. budget planned
- Hours logged vs. schedule progress
- Earned value vs. actual costs-to-date
In Denver, I worked with a 20-person structural team who didn’t realize one of their projects hit 120% of labor budget three weeks too early.
Why? They only reviewed time logs once a month.
Once we implemented a dashboard with cost thresholds and alerts, they caught it immediately on the next job… and recovered 8% margin.
You shouldn’t be flying blind or waiting for retrospective reports. Time data should drive the plane.
Key takeaway: Real-time doesn't mean fancy—it means now. And "now" saves your margins tomorrow.
Data Without Action is Just Noise
Let’s say you’ve locked in clean time and expense capture.
Nice!
But if that data just lives in your accounting software and no one looks at it, you’re wasting an even bigger opportunity.
The most profitable firms I know do one simple thing consistently:
They use their tracking data to make better decisions.
- They spot client types that “waste” hours pre-contract—and politely decline future RFPs.
- They discover which phases deliver the most margin—and begin pricing accordingly.
- They notice the intern logging 35 billable hours/week—and promote her into higher complexity work.
See what’s happening here?
It’s not about time tracking anymore. It’s performance tracking.
Use your data to answer:
- What work is actually worth doing?
- Who are our most efficient producers?
- Where are we hemorrhaging effort for no return?
Tip: Your utilization rate (billable hours ÷ total hours) is the single most important efficiency metric you’re not talking about enough.
The firms running at 75%+ utilization? They stay profitable—reliably.
Turn Data into Decisions: Actionable Reporting Wins Clients
Next-level firms don’t just hoard insights—they share them.
Come billing time, instead of hiding behind vague summaries, they’re sending crystal-clear breakdowns:
- Time spent by phase
- Rates applied per staff/category
- Expenses with attached receipts
I once saw a San Francisco-based interior design firm turn a client dispute into a $20K upsell just by showing detailed phase-by-phase work completed.
Transparency isn’t just about compliance—it builds trust.
More trust = less billing friction = faster collections.
Strong reporting also wins new deals. When you can show prospects exactly how past budgets mapped to deliverables, you're de-risking their investment in you (https://monograph.com/blog/best-time-billing-software-architecture-engineering-firms).
Bottom line: Reporting isn't admin work—it's positioning.
A Word on DCAA and Government Work: Accuracy or Bust
If you're doing anything tied to DOT, FAA, or city contracts, clean tracking isn't optional—it's a legal requirement.
Government contracts come with strings:
- Pre-approved labor categories and corresponding rates
- Strict segregation of direct vs. indirect costs
- Audit-ready documentation for every. single. hour.
You can’t fake this stuff with good intentions or Friday guesses.
You need tools that log:
- Who worked, on what, when, and for how long
- Breaks from standard cost centers (like admin overhead)
- Adjustments or corrections with justifications
One Houston firm I consulted pulled out of government work altogether after two failed audits. Not because they were doing anything illegal—but because their time logs couldn’t stand up to scrutiny.
Don’t be that firm.
If even 10% of your revenue comes from regulated contracts, build your systems now.
And yes, that includes those seemingly “casual” transportation add-ons that suddenly trigger DCAA audits.
Denver-Based? Local Tech Support Matters More Than You Think
Working in Colorado or the Front Range?
Leverage local expertise.
Even the best software becomes a liability when support is two time zones away and doesn’t understand how an architecture firm operates.
Here’s what we’ve seen work well in the Denver area:
- Managed IT services familiar with A&E workflows and Revit performance tuning https://www.invantage3.com/services/ae-bookkeeping-bellevue
- QuickBooks and Deltek integration specialists who know CDOT nuances https://www.invantage3.com/deltek-ajera-support-consulting
- Training partners who show your staff how to track time in actual phases—not just make generic entries https://www.invantage3.com/services/deltek-ajera-experts
And trust me—local matters.
When a system update knocks out invoice reporting mid-cycle, you don’t want to email a support bot and “wait 48 hours for response.”
You want someone in Boulder or the Tech Center who will pick up the phone.
Bonus: Local vendors understand Colorado’s specific compliance layers, whether it’s state-mandated labor reporting or grant-funded infrastructure projects.
Future-Proof Your Firm: Embrace What’s Coming Next
What’s happening right now in A&E accounting isn’t static—it’s transforming.
AI-Powered Time Capture
- Tools that predict where time should be logged based on past work
- Automatic phase tagging as people move through project stages
- Assistant bots that nudge you when you forget to stop a timer or log an expense
These aren’t bells and whistles—they eliminate 90% of admin effort.
Design Tool Integration
BIM integration isn’t optional anymore.
The platforms leading the charge are embedding time tracking into Revit and SketchUp environments—so you’re logging time based on actual model interaction.
Not just guesswork.
Mobile-First with Offline Sync
Field teams in Boise, San Antonio, or remote Colorado counties? They need time logging that doesn’t rely on cell signal.
Expect robust offline support and auto-sync the second they're online.
One firm outside Spokane switched to a platform with this feature and finally got job site time logs in before payroll closed… for the first time in six months.
The future makes things simpler, not more complex—as long as you adopt the right tools.
Wrap-Up: Don’t Let Margins Slip Through Your Fingers
Accurate time and expense tracking does more than reduce admin overhead.
It gives you:
- Full visibility into how your team works
- Profit-focused project planning
- Invoices that build trust and get paid faster
- Compliance strength for any contract
- Data to drive smarter business decisions
Whether you're a five-person design studio in Seattle or a 40-person engineering operation in San Antonio—this isn’t optional anymore.
Time and expenses are the backbone of project profitability.
Track them right, and you unlock growth without adding more hours.
Need help setting up a bulletproof architecture and engineering accounting system that fits your workflow?
You can reach us at info@invantage3.com or call 425-408-9992.
And if you’ve been losing sleep over untracked hours and blurry budgets, now’s the time to fix it.
Accurate architecture and engineering accounting doesn’t just improve your books—it transforms your business.
