D. Brown Management - Cash Flow Tip 14 - Aggressive Billings and Pre-Wiring the Process

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

October 28, 2018 2 minute read

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:

Plan the SOV.
Manage changes.
Punchlist the project as you go, ensuring maximum monthly billing values.
Know the cash flow process and leverage your relationships to ensure billing values are approved before they are formally submitted.
Know what is contractually required and ensure that these requirements are all met when submitting the billing.

Cash Flow

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....

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