Tips for Setting Up a New AEC Business
- Reach CPA
- Oct 2
- 6 min read
PART 1
Ever dreamed of running your own firm? Of calling the shots on how things run (and where the office snacks live)? Same. That’s why we’re kicking off a short series for new AEC founders with practical, straight‑talking tips. No fluff, no 300‑page manual—just the good stuff you can act on today.
Over two posts, we’ll cover eight foundational areas people often gloss over when starting an AEC firm. In Part 1, we’ll hit the first four:
Business Structure: Sole Proprietorship, General Partnership, or Corporation
Software: Importance of Choosing a Project Management Program
Bookkeeping: DIY or Outsource?
Choosing the Right Accountant
Let's get you set up so future-you can take weekends off without panic.
1) Sole Proprietorship, General Partnership, or Corporation: What’s Best for Your AEC Firm?
Starting an architecture, engineering, or construction business comes with a big early decision: how to register the business. The choice affects taxes, liability, and how professional you look on paper. It can be changed later, but it’s fiddly and rarely fun—so it’s worth getting right upfront.
Quick takes
Sole proprietorship: Fast and simple. Also ties business risk to your personal assets.
General partnership: Similar to a sole prop but with two or more partners. You’ll need an partnership agreement so expectations (and exits) are clear.
Corporation: More admin, but opens the door to better tax planning, liability protection, potential brand credibility, and future growth options.
AEC specific notes
Architects: Professional liability is real. Incorporation can help protect personal assets and can align better with your regulatory requirements.
Engineers: Many provinces require a Certificate of Authorization to practice. A corporate structure often fits this more cleanly.
Contractors: If you’re reinvesting in equipment and people, lower corporate tax rates can be a meaningful advantage.
Put it into practice
Book a short consult with a lawyer and/or accountant before you register—cheap insurance against expensive fixes later.
Write down your goals (e.g., keep it lean vs. scale to a team of 10+). Your growth plan should influence structure.
Check your provincial association for licensing/Certificate of Authorization requirements.
No matter what you chose, open a separate corporate bank account on day one.
Helpful resources
Source your provincial architectural, engineering, or construction association
2) Software: Importance of Choosing a Project Management Program
A solid project management (PM) platform isn’t just “nice-to-have” software—it’s the backbone of how you scope, price, deliver, and get paid. Pick a solid one (think ProjectWorks, Fresh Projects, Ooti, etc.) and you’ll see fewer surprises, tighter budgets, and cleaner month-end close. Don’t pick one and you’ll spend more time in spreadsheets than serving clients.
Quick takes
Your PM tool is a financial system in disguise: budgets, time, WIP, and invoicing all start here.
Real-time visibility beats end-of-month autopsies—catch over-servicing and scope creep as it happens.
Integrations matter. Connect time, expenses, and project data to your accounting stack (Xero/QBO) to prevent double entry and errors.
Adoption > features. A simpler tool your team actually uses will outperform a “powerhouse” sits idle.
AEC specific notes
Architects: Set up each stage of work (early design, detailed design, drawings, tender, construction support) as its own line with a clear budget. Log any “extras” as paid changes, not freebies. Use simple roles (e.g., principal, project lead, junior) so you can see where time and money are going. Bill when a stage is done to keep cash moving.
Engineers: Split work by discipline (civil, structural, MEP-Mechanical Electrical Plumbing) so you can see which team is busy or falling behind. Track outside specialists and their costs in the same place. Keep a running list of questions and issues tied to tasks so extra time is captured and billed. Link hours to deliverables so your progress and revenue match.
Contractors: Use your tool as the one place to track budgets, purchase orders, subcontractors, and changes. Match your site costs to the same simple cost codes you use in the office so reports line up. Connect daily site notes and schedule slips to the budget so cost impacts show up right away—not at month-end.
Put Into Practice
Start simple: Set up projects with a few clear stages, a budget for each, and your team’s hourly rates. Get time and expenses flowing first—add extras later.
Use templates: Save a basic project template with default stages and tasks so every new job starts the same way.
Watch the burn: Check one dashboard weekly: budget left, time used, and what’s running hot or cold. Fix anything that’s off by about 10%.
Link to accounting: Sync clients, invoices, and expenses with Xero/QBO. Approve timesheets weekly and create invoices straight from the approved work.
Our Takeaway
Choosing the right project management platform is a financial decision as much as an operational one. When your budgets, time, and deliverables live in one place—with clear workflows and real-time visibility—you stay organized and on budget. The result: fewer write-offs, faster billing, and better margins. Keep it simple, get the basics right, and let the software do the heavy lifting.
3) Bookkeeping: DIY or Outsource?
Classic dilemma. DIY can seem cheaper, but missed deductions, late reconciliations, and “mystery transactions” add up quickly. Outsourcing costs money, but it gives you accuracy, timeliness, and your evenings back.
AEC specific realities
Architects: Try to avoid irregular billing cycles—automation smooths cash peaks and valleys.
Engineers: SR&ED credits, grants, and joint ventures demand precise tracking.
Contractors: Many small, fast-moving transactions (materials, subs, change orders) are easy to miss without a system.
Put It Into Practice
Revisit your goals. How much of your time do you want to spend on bookkeeping? ("None" is a valid answer.) DIY, schedule it like client work. If you outsource, appoint an internal point person to feed information promptly.
If you DIY
Put it on your calendar like client work.
Use tools for receipt capture and bank rules so routine stuff happens automatically.
Quarterly check-ins with an accountant can catch issues early.
If you outsource
Pick an internal point person to send documents quickly and answer questions.
Be clear on who does what (invoicing, paying bills, sales tax filings, tax-credit support).
Ask for simple monthly reports you’ll actually read: cash, unpaid invoices, job profit.
Do today!
Use Hubdoc (or a similar tool) for capturing and auto-fetching receipts.
Create a “Receipts” album on your phone and photograph every paper receipt the moment you get it.
Block a weekly or fortnightly 30‑minute slot to review unreconciled transactions, invoices, and expenses.
Key takeaway: time is not your friend in bookkeeping. The longer you wait, the messier (and pricier) it gets.
Helpful resources
4) How to Choose the Right Accountant for Your AEC Business
Not every accountant thinks the way AEC firms work. You need someone who understands projects and phases so you stay compliant and make smart decisions.
With an AEC-savvy accountant, you’ll see profit by project, track time and changes, and fix issues early. Cash flow matches the work—progress billing is set up right, holdbacks are tracked, and you know what to collect first. Compliance is handled without drama; sales tax, payroll, contractors, and R&D tax credits (SR&ED) are kept tidy. The tools and reports they utilise are practical—Xero or QuickBooks set up for projects, no double entry, and a short monthly summary with clear next steps.
Best of all, it’s proactive: numbers are ready when bids or banks ask, no year-end surprises, and the setup grows with you.
AEC specific focus areas
Architects: Milestone vs fixed-cadence billing, fees structure specific to phases, payments terms for consultants, and deductible expenses.
Engineers: SR&ED and innovation planning.
Contractors: Payroll complexity, bonding requirements, and project cash flow.
Put It Into Practice
Ask industry questions: “How do you help firms manage utilization or job costing?”
Check their tool stack: Can they work with Xero/QBO, your PM software, and your payroll platform?
Look for advisory chops: Beyond compliance—do they guide on growth, cash, and owner compensation?
Request references: Talk to other AEC clients they support.
Clarify fees upfront: Make sure pricing fits your budget and cash cycle.
Our view: Don’t hire a gardener when you need a landscape designer. Look for a team that covers bookkeeping, payroll, compliance, planning, and coaching—because each area affects your tax bill and your sanity.
Coming Up in Part 2
We’ll cover the next four building blocks to round out your setup. If you want a second set of eyes on your structure, systems, or books now, we’re happy to help you get the foundations right—so you can get back to designing, calculating, and building.
If you have any questions about getting started in this process or working with our Team, please reach out today!
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