How I Design an Accounting Module, Drawing on 25 Years of My Own Data

Over 25 years in business, especially in landscape design and construction, I've repeatedly encountered how the lack of adequate management accounting kills even the most promising projects. My journey to creating formspace.design is largely an attempt to solve this long-standing problem, to implement a system that provides a clear understanding of where money goes and where it comes from.

Why Management Accounting is More Important Than Financial Accounting

Financial accounting is essentially reporting for the state. It shows how much you've earned and how much tax you owe. But management accounting is a completely different story. It serves for decision-making within the company. As a director, it was always important for me to see not just overall profit, but to understand which project brings more revenue, where we are overspending the budget, which employee works more efficiently, and where there are "gaps" in processes. Without this, it's impossible to scale, optimize costs, or even just survive a crisis. I remember in the 90s, when I was just starting at Alkar-Invest, we learned this through practice, often by trial and error, because there were simply no ready-made solutions.

Key Metrics I've Collected Over the Years

Over my years at Dom i Sad, I've identified a set of critically important metrics. They became the foundation for designing the accounting module in formspace.design:

• Revenue per project: How much money each specific object brought in.
• Direct costs: The cost of materials, subcontractor work, and team salaries directly for that project.
• Indirect costs: Office rent, administrative staff salaries, equipment depreciation — everything that cannot be attributed to one specific project but needs to be allocated.
• Gross and net profit: Indicators without which profitability cannot be assessed. For me, it was important to see the net profit for each project to understand whether similar ones should be undertaken in the future.
• Cash flow: An equally important indicator. You can be profitable on paper but not have money in your accounts for current expenses. I became convinced of this in the early 2000s when working capital was in the account, but due to payment delays from clients, we could face cash flow gaps. I discussed this in more detail in the article The Difference Between "Having Money" and "Being Profitable": A Lesson from the 90s.
• Employee/team efficiency: How many hours a team worked on a project, what volumes they completed, compared to the plan. For example, if a landscape project on a 1500 square meter plot should be completed in 2 months, and the team finishes in 1.5, it's a reason for analysis and encouragement.

Typical Accounting Mistakes That Cost Me Money

My experience is rich not only with successes but also with costly mistakes. Here are some of them that I took into account when creating the accounting module:

1. Lack of Real-Time Data: If data is entered once a week or month, it's already outdated. Decisions have to be made "blindly." I remember losing up to 20-30% of the initial estimate on some projects because I noticed overspending too late.
2. Mixing Personal and Business Finances: A classic small business mistake. It creates confusion and prevents a clear view of the real picture.
3. Ignoring Small Expenses: "Bought a shovel for 500 rubles, oh well, I'll forget to record it." Such trifles accumulate and can make up a significant part of the project or company budget as a whole.
4. Inaccurate Project Cost Estimation: If the initial estimate is poorly prepared, then accounting will be useless. It's important to clearly include all expense items: from materials to logistics and unforeseen costs. I described in detail how much the lack of a system cost me in the article How Much Money I Lost Due to the Lack of a Proper CRM in Dom i Sad.
5. Lack of Detail: If a report says "materials — 100,000," it says nothing. Which materials exactly? For which stage? From which supplier? The module should allow drilling down into details.

How I Structure Data for the Module

For me, the project has always been the foundation. All accounting is built around it. Each project in my system is a separate entity, to which the following are linked:

• Clients: Contact details, interaction history, payments.
• Work stages: Design, earthworks, landscaping, installation, etc. For each stage, I track the budget and actual costs.
• Materials: Purchases, stock balances (if any), write-offs for a specific project. I strive to automate this process as much as possible to avoid up to 10-15% errors during manual data entry.
• Working hours: Tracking hours worked by each team or specialist at each stage of the project. This allows for accurate calculation of labor costs.
• Payments: All incoming and outgoing transactions, linked to the project and counterparties.

This structure allows me to see the complete picture for each project: from its start to completion, with a precise understanding of all financial flows.

Reporting: What I Needed to See on My Desk

The accounting module should provide not just data, but meaningful reporting. I always needed the following types of reports:

• Daily team reports: What was done, how many hours worked, what materials were used. This allows for prompt work adjustments.
• Weekly project reports: Plan/actual comparison for budget and deadlines. This is critical for projects lasting 2-3 months to avoid missing deviations.
• Monthly company reports: Overall profit, expenses, cash flow. Helps assess the overall business condition and make strategic decisions.
• Accounts receivable/payable reports: To always know who owes us and whom we owe.
• Profitability reports: Show which services or project types are most profitable.

All these reports must be simple, visual, and accessible so that I can quickly make decisions without spending hours compiling them.

How I Plan in formspace.design

Although formspace.design is primarily focused on landscape design, its logic and modules were initially designed with future integration with management accounting in mind. My goal is to create a unified ecosystem where project data, from sketch to implementation, automatically forms the basis for financial analysis.

For example, when I start a new project, I upload a site plan to formspace.design. Then, using module 1.x "Plan/Zones/Objects," I create zoning and place key elements. Next, with module 2.1 "AI Concept," I generate several design options. Already at this stage, having precise zone dimensions and object counts, the system can provide approximate volumes of work and materials. This data is the foundation for my future estimate and, consequently, for financial planning. The exact quantity of paving stones for paths, the volume of soil for flowerbeds, or the area of the lawn, obtained at the design stage, directly affect the accuracy of the future accounting module. Module 3.1 "Design by Photo" also allows for quick visualization of ideas and assessment of the scope of work, which is critical for early budget estimation.

FAQ

Do I need a separate accountant for a small business?

For management accounting in a small business, especially at the initial stage, a competent owner and a good system are often sufficient. An accountant typically handles external reporting and taxes. Management accounting requires a deeper understanding of internal processes and metrics that are important to you for decision-making.

How often should financial reports be analyzed?

This depends on the scale of the business and the speed of change. Daily monitoring of operational indicators (e.g., by teams) and weekly project analysis is my minimum. I recommend analyzing general company financial reports (profit and loss, cash flow) monthly, and strategic ones quarterly.

What if the data doesn't reconcile?

Discrepancies in data are a signal for immediate investigation. Most often, the reason lies in data entry errors, incomplete accounting, or incorrect classification of operations. You need to go back to the source documents, check each transaction, and train employees on proper form completion. Ignoring such discrepancies is unacceptable, otherwise, the entire accounting system loses its meaning.

What tools are best to start accounting with?

You can start with simple Excel spreadsheets, but as your business grows, more specialized software will be needed. I myself went through this path, from notes in a notebook to complex systems. The main thing is to choose a tool that allows you to record the key metrics for you and is easily scalable. Ultimately, this experience led me to create formspace.design, where I plan to integrate these capabilities.

How to motivate employees to keep records?

Motivation starts with explaining the importance of accounting for the overall success of the company, rather than just as "extra bureaucracy." Show how accurate data helps make better decisions, improve processes, and even affect their own compensation. Implementing convenient and simple tools, such as mobile apps for data entry, also significantly increases their willingness to cooperate.

Can one rely solely on intuition in financial management?

Intuition is a valuable asset, especially for an experienced entrepreneur, but it must be supported by solid data. In the 90s, when data was scarce, we often acted on intuition, but it was always a big risk. Today, when there is an opportunity to collect and analyze information, relying solely on intuition means voluntarily giving up a competitive advantage and exposing the business to unnecessary risks.

How to avoid "cash flow gaps"?

Cash flow gaps occur when there is no money for current payments, even if the business is profitable overall. Careful cash flow planning helps avoid them. You always need to know when receipts are expected and when large payments are due. Create a cash flow forecast for several months ahead and regularly compare it with actual data. This allows you to foresee potential problems and take action in advance.

Which indicators are more important: profit or revenue?

Both indicators are important, but for business health, profit always comes first. High revenue with low or negative profit means you are working a lot but not earning. Profit shows the real efficiency of your operations. Revenue, on the other hand, is important for assessing scale and growth potential, but without profit, it's just an illusion of success.

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Creating an effective management accounting module is a long, iterative process based on a deep understanding of real business needs. My 25 years of experience in entrepreneurship and landscape design have allowed me to form a clear vision of what such a tool should be. And I am embodying this vision in formspace.design, so that every property owner can make informed decisions, relying on accurate data, not guesswork.

FAQ

How to get started with formspace.design?

Open a site project, define boundaries and zones, then specify objects. This way, you immediately see the structure, not just a "pretty picture."

How does formspace.design differ from a one-off image from a generator?

In formspace.design, you work with a plan, zones, and scenarios (concept, photo design) that can be edited and saved within the project.

Can you do without a team of programmers?

Yes — if you have domain expertise and discipline. I am building formspace.design with AI, drawing on the practice of the landscape business.

What if the AI made a mistake in plants or scale?

Check climate, dimensions, and adjacency based on the actual site. The tool speeds up the draft, but the final decision is yours.

How to link the plan with the estimate and the client?

After the basic plan, it's easier to agree on volumes and stages: fewer "forgotten" tasks and reworks on site.