Free calculator for architecture firm owners
How much can an architecture firm owner pay themselves?
A firm principal's pay depends on profit after salaries, and on how much cash is tied up in unbilled work and slow clients.
The starting numbers are an example for an architecture firm. Replace them with yours.
Three rules for paying yourself from an architecture firm
- Base steady pay on average profit across several months.
- Check unbilled work and slow clients before any extra draw.
- Personal taxes come out of what you take. Ask your accountant how much to set aside.
What changes the answer for an architecture firm
A large phase payment can look like a strong month. It usually pays for a quarter of work already done. Steady pay from average profit avoids the next gap.
The worked example
In the example, the business keeps $82,000. That covers $60,000 for two payrolls, $10,000 of monthly bills and $12,000 due soon. Steady pay comes to $12,000 a month. Anything above $82,000 in the bank is spare.
A common question
How should an architecture firm handle slow-paying developers?
Bill monthly by percent complete, state payment terms in the contract, and keep the right to stop work for late payment. Forecast each client at their usual speed.
Know what is safe to take, every week
One Page CFO shows the cash above your safe line every Monday, from your QuickBooks, checked by a CFO.