Multiplier is computed on billing rates
Net multiplier is revenue over raw labour cost. Computed from billing rates rather than actual loaded cost, it reports a number the firm is not achieving.
ERP by industry
Design firms live on multipliers, phases, and sub-consultants. Every one of those needs raw labour cost, phase-level budgets, and committed sub-consultant cost in the same place — and in most firms they are in three.
Send a project list, timesheets, and a ledger export. We will compute effective multiplier and phase margin.
The problems
AEC firms have unusually well-defined economics and unusually poor visibility into them, because the inputs are split across systems.
Net multiplier is revenue over raw labour cost. Computed from billing rates rather than actual loaded cost, it reports a number the firm is not achieving.
A project on budget overall can contain a schematic design phase forty percent over and a construction administration phase that never gets started. Both are invisible at project level.
Structural, MEP, and civil sub-consultant invoices arrive weeks after the work, coded generally, and reach the project after the phase is closed.
Revenue earned against progress on a fixed-fee design contract, computed monthly by one person, and the number auditors probe hardest.
Scope beyond the contract gets done because the client asked and the relationship matters. Whether it was ever billed is discovered at closeout.
Design staff record time weekly and approximately. Phase-level margin built on that inherits its inaccuracy, and phase is where the decisions are.
Where the money goes
A representative shape for a design firm between $10M and $50M. Sub-consultant pass-through is excluded so the multiplier reflects the firm's own labour.
Work performed beyond the contracted scope, done because the client asked and the relationship matters, commonly runs four to six points of net fee. It is almost never tracked as it happens, which means the decision to absorb it is never actually made — it is discovered at closeout, by which point the additional services request cannot be raised.
Your stack
Your design tools and project management stay exactly where they are. What changes is that phase economics become visible during the phase.
Benchmarks
Drawn from our own engagements with design firms between $10M and $50M. The bar is a typical erp.io customer after two quarters; the marker is the segment median.
Net multiplier — net fee revenue divided by raw labour cost — is the central metric in design firm economics and it is frequently computed against billing rates rather than actual salary cost.
That produces a target multiplier the firm believes it is achieving and an effective multiplier it is not. The gap is the write-off, the unbilled additional services, and the hours recorded against the wrong phase, and each of those is addressable once separated.
Design contracts are phased and each phase has its own budget, its own staffing shape, and its own risk profile. Schematic design overruns are a scoping problem; construction administration overruns are a project-duration problem. They need different responses and a project-level number cannot tell them apart.
Phase-level budget against actual, updated as time is approved, is what makes the distinction visible while the phase is running.
A structural or MEP sub-consultant on a signed agreement represents committed cost from the day the agreement is signed, not from the day the invoice arrives six weeks later.
Counting the commitment rather than the invoice is what makes phase margin true during the phase. It also surfaces the sub-consultant whose fee has crept beyond their agreement, which is a conversation worth having before the final invoice.
The most valuable thing on this page for most firms is a mechanism for recording out-of-scope work at the moment it is performed rather than reconstructing it at closeout.
Firms that do this bill substantially more of it — our customers move from roughly half to above eighty percent — not because they become more aggressive with clients but because the request is raised while the work is fresh and the client remembers asking for it.
We are not a design or project management platform. Drawing management, submittals, RFIs, BIM coordination, and document control belong in Deltek, Newforma, or Autodesk and we integrate rather than compete. Firms whose primary requirement is AEC-specific project workflow rather than financial visibility should invest there first. We handle the money side and read yours.
Questions
Computed against raw labour cost rather than billing rates. The gap is usually where the year went.