Cash Flow Tip 14 - Aggressive Billings and Pre-Wiring the Process

A basic Schedule-of-Values (SOV) with flat billings and normal collection processes will yield about a 30% return on capital over the first 12 months of a project when looking at it from a cash basis.

D. Brown Management Profile Picture
Share

This is in the average-high range for contractors, depending on type.  

Cash Flow: Tip 14 Aggressive Billings - Pre-Wiring for Success. From a 12-month 31% return-on-capital at risk which is the high-average for contractors up to a 49% or greater return. Punch-as-You-Go Ensuring Maximum Monthly Billings Percentage of Completions “Sold” Ahead of Billing Change Order Approvals Contractually Required Support Documents Verified Early

Our focus is helping contractors achieve performance in the upper end of their peers, including cash flow. Look at the differences that aggressive management of every aspect of billings can make:

 


Cash Flow Tip 14 - Aggressive Billings and Pre-Wiring the Process
Great cash flow is a key driver of valuation and successful successions. Running out of cash is is the #1 reason contractors fail. Improving cash flow improves your Return on Equity. Protect yourself and never let cash flow be the limitation to your profitable growth....

Related Training
Cash Flow Tip 14 - Aggressive Billings and Pre-Wiring the Process
Great cash flow is a key driver of valuation and successful successions. Running out of cash is is the #1 reason contractors fail. Improving cash flow improves your Return on Equity. Protect yourself and never let cash flow be the limitation to your profitable growth....

PICK SMART Improvements
Contractors will never have enough resources to solve all problems or take advantage of every opportunity they face. There are a couple tools that can be used to align the team around the best utilization of resources:
Rockefeller and Dealing With People
“Hard Skills” including the technical ability to design and build a project are the foundation of the construction industry. The “Soft Skills” such as the ability to deal with people is the glue that holds complex projects and contractors together.
Cash Flow Tip 2 - Winning and Building the Right Mix and Velocity of Projects
It seems obvious but the first thing you must do is consistently build projects that meet or exceed your budgeted profit expectations.