For most architecture and engineering (A/E) firms, licensing and entity management tasks are spread across various functional areas and systems. Annual reports and registered agent service may be managed through legal or finance teams, while licensing usually falls to operations. Often individual architect and engineer licenses—the backbone of firm licensing—are managed independently by employees.

This scattershot approach saps a firm’s financial performance and competitive abilities. Subtle effects such as wasted staff hours or a lack of agility can pass under the radar for years. The big hits, on the other hand—a citation received, or a prime opportunity missed—make the impact of licensing unmistakably clear.

By adopting the following regulatory habits, firms can harness the positive power of compliance to boost performance.

1. Connect the dots.
High-performing firms connect individual professional licenses, certificates of authorization (COAs), and entity management tasks through shared reporting and connected workflows. Connecting individual and firm licensing can prevent a common source of citations for A/E firms: a lapsed engineer or architect license leading to forfeiture of the firm’s COA. When a qualifier leaves, failing to promptly appoint a replacement jeopardizes the firm’s COA.

Looping in entity management tasks is equally important because of the need to keep secretaries of state and licensing boards up to date on changes in company information.

Where to begin: Conduct a compliance audit encompassing secretary of state filings, tax registrations, firm COAs, and individual licenses to identify who is responsible for tasks and how changes are communicated between staff members and state agencies. Then establish responsibilities and workflows to safeguard licensure and good standing.

2. Be proactive.
Addressing licensing needs early in the business development cycle is also key to performance. Most of the firms we work with can recount a prime opportunity they missed because they couldn’t get the licenses in time. Unfortunately, in some jurisdictions, the path to licensure is measured in months, not weeks. Firms are often unprepared for the time and work required to meet requirements in challenging jurisdictions.

Where to begin: Create a regulatory road map that identifies prime growth opportunities and matches them with licensing and entity needs.

3. Know your jurisdictions.

Licensing processes and approval times vary widely, from a couple of weeks in some states to 12 weeks or more in others. If you need an accurate timeline, call, as timelines listed on state websites may not reflect the board’s current workload and response times.

Also pay close attention to the specific steps required in each jurisdiction. In some states, secretary of state registrations precede the COA, while in others, the process begins with the professional licensing board. Missing a step or taking them out of order can cost you precious weeks in the licensing process.

Where to begin: Research secretary of state and licensing board requirements side by side before beginning any filings in a new jurisdiction.

4. Follow application instructions to the letter.

In some jurisdictions, more than 50 percent of foreign qualifications and 90 percent of initial license applications are rejected because of minor errors or failure to follow precise instructions. In New York, for example, an application can be rejected simply for omitting the periods in P.C. or P.L.L.C. When it comes to COAs, no detail is too small to merit your full attention.

Where to begin: Many states provide detailed guidelines on their websites. Read instructions carefully and call state agencies to resolve any questions you have before completing an application.

5. Automate renewals and annual filings.

Managing all of your corporate filings and licenses through a single interface provides easy access to documents and worry-free compliance across your enterprise. Dedicated compliance software can generate reminders for renewals and other tasks, reducing administrative paperwork and preventing errors.

Where to begin: Look for cloud-based software that handles the full range of licensing and entity management needs for A/E firms.

Compliance Boosts Performance

By adopting sound, proactive regulatory habits, A/E firms can streamline administrative processes, safeguard compliance, and enjoy significant competitive advantages.

Connect and Thrive!

If you would like a complimentary licensing audit, help with assembling a regulatory road map, or a demo of our proprietary cloud-based compliance software, drop by the Harbor Compliance booth at THRIVE 2018 to held October 22-24 in San Diego! Christian Haring will be happy to connect and answer your questions.

Harbor Compliance is not an accounting or law firm and does not provide tax, financial, or legal advice.

About the Author: Christian Haring is an Account Executive at Harbor Compliance specializing in professional licensing for engineering, architecture, and construction firms. With a focus on mid-sized and large firms, Christian understands the need for precision and clarity in managing multi-jurisdictional licensing. Christian’s core focus is providing compliance as a growth enabler for his clients. He is available to answer your questions at 1-717-298-8128 or charing@harborcompliance.com.