Over and Under Billing Metric Trend

Contractors looking for key metrics to manage should be focused on Outcomes or Key Results, and Lead Measures or Leading Activities.

D. Brown Management Profile Picture
Share

 

Cash Flow: Over / (Under) Billing Trend.
  • OUTCOMES: Or Key Results. What metric(s) will best show the final state you want to be in AND progress toward that target level of performance?
  • LEAD MEASURES: Or Leading Activities that will most likely lead to the Key Results or Outcomes you want. The metrics that measure the Leading Activities are typically at a more rapid cycle time than the outcome based metric.  

At the cash flow level, if you want to improve your Cash Metric to 100% or better, the first activity that must be controlled is the monthly billing performance of the projects.  

No amount of excellence in collections will help you get close to 100% if you are continuously under-billed on your Work-in-Progress (WIP) as a whole.

Metrics alone WILL NOT change your outcomes; they will simply let you know the score. The most important aspect of this is the regular Operating Rhythm that reinforces a rigorous PDCA cycle each period, similar to what the Last Planner System does at the project level.


Over and Under Billing Metric Trend
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....

Over and Under Billing Metric Trend
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....

Net Profits - Four Major Levers
Increasing net profits for contractors comes down to four major levers that can be pulled.
Retirement Onboarding - Transferring Your Knowledge to the Team
Knowledge transfer is hard. How do you effectively take the knowledge that one individual has accumulated over a lifetime with a company and transfer that knowledge to the next person in line?
Incentive Compensation for Contractors - Culture
Any incentive program should improve the operating execution, profit, and cash flow of the company. Aligning organizational objectives with the tangible value add to the craft worker in the field and operations staff workers yields the best results.