How to track fees by project stage in an engineering consultancy

To track fees by project stage, split each job's fee across its stages on the day you are appointed, have every hour booked to a job and a stage, and compare the value of those hours at your charge-out rates with the stage's fee every week while the stage is still open. Left to month end, the third step comes too late, because by then a stage can already be over its fee. The comparison is arithmetic and can be handed over. How far through a stage the work really is, and what to do about an overrun, are an engineer's and a director's to say.

When should fee tracking by stage start?

A civil, structural or building services consultancy usually agrees a fee for a defined schedule of services, and the building projects it works on are organised into stages; the RIBA Plan of Work, which design teams commonly work to, has eight. Your fee is earned stage by stage and often invoiced that way, or monthly against the share of the stage completed. So tracking starts on the day you are appointed. The moment the appointment is signed, the fee should exist in your time system in the same pieces.

The steps, and who does each today

1. Split the fee by stage. A director decided the split when pricing the bid. An office manager or project administrator enters it against the job number. If the bid was one lump sum with no split, nobody can say later which stage lost the money.

2. Turn each stage's fee into hours. At your charge-out rates, the stage fee is a number of hours of each grade. That is the budget the engineers are working to, whether or not anyone has told them.

3. Book time to the job and the stage. Every engineer books every week. Hours booked to the job with no stage, or to the wrong stage, make the comparison useless. The office manager chases the missing timesheets.

4. Compare, while the stage is open. Set the hours booked so far, at charge-out rates, against the stage fee. Today a director does this in a spreadsheet at month end.

5. Ask how far through the stage the work is. A stage that has used 70 per cent of its fee is fine if the work is 80 per cent done and in trouble if it is half done. Only the project engineer knows which.

6. Act on the difference. If the overrun comes from work outside the agreed schedule of services, it may be a variation to raise with the client. If it comes from your own team, it is a resourcing question. A director decides.

7. Invoice the stage. When the project engineer confirms the stage is complete, or on the dates your appointment sets.

Why is month end too late?

A stage on a small job can open and close inside a month. A report built after month end tells you what a stage cost, not what it is costing. By the time the figures show extra work a client asked for, the drawings have been issued. Tracking by stage lets you talk about a further fee before the work is done, which means looking at open stages weekly.

Which steps an AI worker can take on

Here it works to a written specification, and a named person checks what it produces. It can remind anyone whose timesheet is missing before the cut-off, and query hours booked to a job with no stage or to a stage already closed. It can build the weekly report from your time system: for each open stage, the fee, the value of hours booked and what remains. It can ask each project engineer one question on the day you set, how far through the stage are you, and put the answer beside the figures. It can mark the stages where the share of fee used has run ahead of the share of work done for the directors. It works in a time system such as CMap through the route the maker publishes, confirmed with you at the start.

When a stage is confirmed complete it can prepare the stage invoice for a person to check. The fee proposals, technical queries and site expenses that fill the rest of a consultancy's week are on our page for engineering consultancies.

What waits for a person, and why

Nobody's hours are entered or changed by the agent, because the person who did the work books it, and a manager approves it. The estimate of how complete a stage is belongs to the project engineer, because it is a judgement about the design and not a count. Whether an overrun is a variation, and whether to raise it, is a director's decision, since it turns on what the schedule of services says. The agent does not write to a client about fees. A gap in the figures is shown as a gap and never estimated.

What to have ready before you start

• Every live job's fee split by stage, in the time system and not only in the bid.

• Stage codes that are the same on every job, so that hours can be booked to them.

• The rates you want the comparison made at.

• The weekly cut-off for timesheets, and who approves them.

• The threshold at which a stage is brought to a director.

• The day of the week the directors want the list.

Splitting the fee on your live jobs and telling each project engineer the hours their stage has left takes an afternoon, and changes behaviour on its own. What unbilled hours do to a firm that sells time is in how to scale an engineering consultancy without hiring.

The worker would chase timesheets to the cut-off and give your directors a weekly list of the stages running ahead of their fee, and the judgement and the client conversation would stay with them. Start with your list of open stages, and talk to our agent.