2.2.2 – Project Financials – Processes

Introduction

The Business Objects defined in Article 1 (Periods, Accounts, Projects, Proposals, Invoices, Missions, and Activities) form the foundation of Arcanary’s administrative system.
This article explains the processes that connect those objects — how proposals are issued, how invoices are created, and how responsibilities are distributed between Project Managers, Office Managers, Business Administrators, and Financial Controllers.

Step 1: Project Setup

Responsibility: Project Manager

  • Project Setup Requirements:
    • Name, code, number, description.
    • Classification fields: building class, typology, use, address, single/multi-area.
    • Project Manager assignment.
    • Current term (most advanced active stage).
    • Type of service (Architecture, Interiors, Modeling, Documentation).
    • Role (Consultant, Lead Consultant, Sub-Consultant).
  • Purpose: Provides the framework for all proposals, missions, and invoices.

Step 2: Account Setup

Responsibility: Project Manager, validated by Office Manager

  • Definition: The account is the entity paying for the project.
  • May or may not be the principal: Sometimes the builder/developer pays, even if the end user is the beneficiary.
  • Types of accounts: private individual, group, or business/institution.
  • Purpose: Ensures every project is tied to a paying entity from the start.

Step 3: Proposal Setup

Responsibility: Project Manager (draft) + Business Administrator (review)

  • Types of proposals:
    1. Service Proposal (formal): Detailed document with scope, stages, timing, deliverables, terms.
    2. Informal Proposal: Typically an email for small variations, without formal terms.
  • Account link:
    • Existing client → link proposal to existing account.
    • New lead → create a temporary account until confirmed.
  • Structure:
    • Line items = deliverables (schematic design, 3D scan, consulting).
    • Items may be lump sum, progressive, or hourly.
  • Rule: Every invoice must trace back to a proposal.

Step 4: Invoicing Process

4.1 Data Collection

Responsibility: Project Manager + Members

  • Sources of data:
    • Missions: Deliverables completed.
    • Events: Billable meetings/inspections.
    • Activities: Time tracked by members (A or D).
    • Proposals: Line items and percentages.
  • How data is collected:
    • Through the Activity page in the app.
    • Filter by project and period (e.g., 2509).
    • Sub-tabs allow filtering by last month or manual selection of a specific period.

4.2 Invoice Preparation

Responsibility: Project Manager (draft) + Business Administrator (final check)

  • Preconditions:
    • PM must know standards and conventions.
    • Confirm the current period.
    • Review invoice history for the project to avoid duplication.
  • Drafting:
    • Invoices are created in Xero (or equivalent).
    • Project Managers prepare invoices in draft mode during the period.
    • Drafts can be copied from previous invoices for efficiency.
  • Structure & Linkage:
    • 1 Invoice → 1 Period → 1 Proposal → 1 Project → 1 Account.
    • All invoices must be linked back to a proposal.
  • Line Items:
    • Title in ALL CAPS, identical to proposal line.
    • Short description underneath.
    • Quantity = percentage claimed (0.2 = 20%).
    • Progress accumulates until reaching 100% (1.0).
  • Item Types:
    1. Progressive Items (e.g., schematic design).
    2. Milestone/Discrete Items (e.g., DEA package, 3D scan).
    3. Hourly Rate Works:
      • Proposal must define hourly rates by role.
      • Each invoice should have hourly lines per role (Member, PM, OM).
    4. Events:
      • Title = event type (ALL CAPS).
      • Description = breakdown of participants and rates (e.g., Director 3h @ $180, PM 4h @ $150).
    5. Subcontractors/Materials:
      • Title = consultant/material (ALL CAPS).
      • Description = base fee + admin/markup (e.g., “Surveyor’s Invoice: $2,000 + 10% admin = $2,200”).
  • Purpose of markup/admin fees:
    • Reflects additional financial/admin overhead beyond project management.
    • Transparent to clients, included in both proposals and invoices.

4.3 Invoice Follow-Up & Reconciliation

Responsibility: Office Manager + Financial Controller

  • Review & Approval:
    • Draft invoices are set to “Waiting Approval.”
    • Office Manager reviews activities, missions, proposals for accuracy.
    • Has authority to approve and send invoices directly.
  • Follow-Up:
    • Financial Controller tracks payments, sends reminders, and reconciles invoices.
    • Consultant invoices are cross-checked to ensure costs are passed through to the project (with markup/admin).
  • Profitability Analysis:
    • Office Manager uses the Activity Panel to analyze profitability: by project, by person, by product.
    • Identifies where resources are most/least profitable.
    • Financial Controller allocates overhead costs (rent, insurance, subscriptions) pro rata per period to ensure true profitability reporting.

Examples

  • Progressive item: Schematic Design ($3,000) invoiced at 20% → 30% → 50% across three periods until reaching 100%.
  • Mixed items: Second invoice might include Schematic Design (30%) + Design Development (10%).
  • Event: Site Meeting invoiced as:
    • DIRECTOR – 3h @ $180 = $540
    • PM – 4h @ $150 = $600
  • Subcontractor: SURVEYOR'S INVOICE → Base fee $2,000 + 10% admin = $2,200.

Conclusion

This process ensures that every deliverable is proposed, tracked, invoiced, and reconciled with full transparency.

  • Project Managers define scope and prepare drafts.
  • Members log activities.
  • Office Managers validate and issue invoices.
  • Business Administrators and Financial Controllers ensure financial compliance and profitability.

By following these steps, Arcanary maintains consistency, clarity, and financial health across all projects.