I was delighted to be invited to guest lecture at Birmingham School of Architecture at BCU recently. Ruth Reed, Programme Director of the Prost-grad Diploma in Architectural Practice needed someone to talk to Part 3 students about Financial Management in professional practice. I have over 10 years of experience working at management level in small practices, a large proportion of which was spent managing finances – so of course I agreed.
The content of the module seemed straightforward enough: invoicing, payment of fees, cashflow forecasting, business planning, resource management, taxation, and so on. But I knew I was going to be faced with a room full of people who I could be fairly sure didn’t study architecture because they find tax issues and spreadsheets fascinating.
I had 2.5 hours to cover this enormous topic but together we worked our way through it, and finished off with 5 group exercises which I hoped demonstrated that financial management is simple. I’m delighted to report that no-one fell asleep and I definitely heard someone utter the words “I love spreadsheets” (no joke!). It might have helped that I approached the subject matter from the perspective of a fictitious small (micro) practice with a modest turnover and who employed just 4 members of staff. Scaling financial management right down to this level seems to be an effective way of understanding the basics.
A few points from the lecture (and I would welcome feedback on these points from practitioners):
- keeping accurate accounting records and updating them regularly will avoid any nasty surprises.
- a cashflow forecast and a budget are two different things.
- a traditional invoicing schedule (ie. invoicing on completion of a workstage) isn’t always the best invoicing schedule.
- setting goals in a financial business plan and regularly reviewing them as a team means that aims are more likely to be achieved.
- financial management isn’t a science, you don’t need to be an expert or necessarily even have an interest in accounting – if you can manage your own bank account you can manage the finances of a SME.
- keep it simple!
We finished off with some thoughts about other industries, particularly new emerging industries such as web development, and how they can be applied to our own industry. The message I was sharing was that the old ways aren’t always the best. I’m always looking for new ways to liven up financial management or make life easier. In fact one of the examples I cited was Angry Productive Birds. It’s a bit of fun and possibly a bit silly, but hey, why can’t time management and project resourcing be fun?
I’m pleased to say that the students seems to enjoy the lecture. They went away looking less worried and the feedback I’ve received so far is very positive. I hope to be able to deliver this lecture again in the future.
Comments from those who attended the lecture, along with comments from practitioners about managing finances would be most welcome.