Your Pipeline Is Busy. Is It Healthy?

The market continues to generate interest, but that interest is taking longer to become billable work. Architecture firms need to evaluate the quality of their pipeline, the probability of conversion, and the expected timing of future revenue.

The latest industry data illustrates the growing distance between initial interest and active work.

In July 2026, the AIA/Deltek Architecture Billings Index reported:

• Architecture billings: 46.6

• Project inquiries: 52.6

• Newly signed design contracts: 47.2

A score above 50 indicates growth, while a score below 50 indicates contraction. Project inquiries increased in July, while signed contracts and firm billings declined. The current downturn in firm billings has lasted nearly three and a half years, making it the longest contraction in the history of the index. (AIA, July 2026 ABI)

The June 2026 data showed a similar pattern. Project inquiries reached 56.1, while design contracts measured 49.8 and billings measured 47.3. Average firm backlogs also decreased from 6.6 months in the first quarter to 6.3 months in the second quarter. Among firms with less than $250,000 in annual billings, the average backlog dropped from 4.9 months to 3.1 months. (AIA, June 2026 ABI)

These numbers reflect what many firm leaders are experiencing. Conversations are active, proposals are going out, and prospective clients are expressing interest. At the same time, clients are taking longer to make decisions, projects are starting later, and fewer opportunities are becoming contracted work.

Interest, Backlog, and Billings Represent Different Stages

A busy pipeline can create a strong sense of momentum. Reliable forecasting requires a closer look at the stage, quality, and timing of each opportunity.

Prospective clients may be exploring feasibility, comparing firms, seeking financing, revising scope, or waiting for internal approval. These opportunities belong in the business development pipeline, but each one carries a different probability of becoming revenue.

A clear pipeline should separate:

• Early conversations and general inquiries

• Qualified opportunities with an identified scope, budget, and decision-maker

• Proposals with a defined selection timeline

• Verbal awards awaiting an agreement

• Executed contracts awaiting notice to proceed

• Active projects generating billable work

These categories help leadership understand which opportunities represent potential work, which ones are likely to move forward, and which ones can support financial and staffing decisions.

Measure Conversion and Timing

Proposal volume measures business development activity. Conversion rates and timing reveal the financial value of that activity.

Firm leaders should regularly review:

• The percentage of inquiries that become qualified opportunities

• The percentage of proposals that become signed contracts

• The average time from inquiry to contract

• The average time from contract execution to the first invoice

• The clients, project types, and lead sources with the strongest conversion rates

• The value of opportunities without a defined next step

• The amount of contracted work expected to become billable within 30, 60, and 90 days

These indicators provide a more accurate view of future revenue and help firms identify where opportunities are slowing down.

Build a Weighted Pipeline

A weighted pipeline assigns a probability to each opportunity based on its current stage. This creates a realistic revenue forecast and gives leadership a stronger foundation for planning.

For example:

• Early inquiry: 10%

• Qualified opportunity: 25%

• Proposal submitted: 50%

• Shortlisted or negotiating: 75%

• Verbally awarded: 90%

• Contract executed: 100%

A firm should refine these percentages using its own historical conversion data. Over time, the weighted forecast becomes more accurate and more useful.

For example, a firm with $2 million in open proposals may initially feel confident about future workload. If the weighted value of those proposals is $850,000 and only $300,000 is expected to begin within the next 90 days, leadership has a clearer picture of near-term revenue and staffing needs.

Connect the Pipeline to Operations

The July 2026 data shows continued client interest alongside declining contracts and billings. This environment requires close coordination between business development, project management, staffing, and financial planning.

Firm leaders should:

• Review the pipeline on a consistent schedule

• Assign a next action, responsible person, and target date to each opportunity

• Update expected contract and project start dates

• Remove stale opportunities from active forecasts

• Track proposal age and follow-up activity

• Compare projected start dates with actual start dates

• Base hiring decisions on contracted backlog and realistic project timing

• Align cash-flow forecasts with expected billing schedules

These practices turn the pipeline into a useful management tool. Leadership gains a clear view of expected workload, staffing capacity, and future cash flow.

The market is still generating interest, but interest is taking longer to become billable work. Operations by Design can help your firm distinguish a healthy pipeline from an optimistic one.

We connect business development data with backlog, staffing, cash-flow, and revenue forecasting so firm leaders can plan with clarity and confidence.