ARE 5.0: PcM study guide
ARE 5.0: PcM · Work through your exam, one topic at a time.
Practice Management (PcM) is one of the six divisions of the Architect Registration Examination, the ARE 5.0, which NCARB administers as part of the path to architectural licensure. The other divisions follow a project through management, programming and analysis, planning and design, development and documentation, and construction and evaluation. PcM instead looks at the practice that takes on the project: how a firm organizes itself, finds and wins work, prices and contracts for services, controls its finances and its exposure to risk, and keeps its client and regulatory relationships sound. Candidates usually meet this material on the job long before they meet it on an exam, which is why it rewards structured study. Topics on this exam: Practice-Wide Delivery of Services, Firm Financial Management and Risk Control, and Business Development and Practice Methodologies. The ARE 5.0: PcM study guide has 3 sections and about 1,040 words.
01Practice-Wide Delivery of Services
Practice-wide delivery begins with how the firm is legally organized and how it protects the public. Sole proprietorships and general partnerships expose owners to personal liability; LLPs, LLCs, and professional corporations can limit commercial liability, but they do not eliminate an architect's personal responsibility for professional negligence.
374 words, about 2 min02Firm Financial Management and Risk Control
Firm financial management rests on three statements: the balance sheet, which shows assets, liabilities, and equity at a moment in time; the income statement, which shows revenue, expenses, and profit over a period; and the cash flow statement, which explains changes in cash. Accrual accounting recognizes revenue when earned and expenses when incurred; cash accounting recognizes them when money moves.
342 words, about 2 min03Business Development and Practice Methodologies
Business development is broader than marketing. Marketing communicates the firm's expertise; business development builds relationships and pursues specific opportunities.
324 words, about 2 min