Cash Flow Tip 7 - Schedule-of-Values

Having a good Schedule-of-Values (SOV) and billing format will set you up for cash flow success throughout the project.

D. Brown Management Profile Picture
Share

Even the best project teams will have a difficult time overcoming a poorly set up SOV, so make sure that you invest the right amount of time in this process up front.  

Cash Flow: Tip 7 Schedule of Values (SOV) and Billing Formats
  • Develop a billing format that is easy to reconcile internally with changes and progress billings.  
  • Ensure that the billing format is easy to understand for the customer and easily integrates with their systems.  
  • Have the project schedule in-hand or at least know the basic flow of the project before developing your SOV.
  • Develop your SOV after you develop your budget and make sure they are integrated so your cash flow looks good based on the project schedule.  
  • Have a structured internal review process to ensure both good cash flow AND that you are not introducing other risks based on how the SOV is loaded.  
  • Looking at the map of your cash flow process in the project, sell the SOV to the appropriate people to ensure smooth progress billings. Use this as an opportunity to build relationships. 

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....

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....

Perspectives on Development - Focusing on Strengths AND Weaknesses
There are a couple of schools of thought on development. The highest performers tend to embrace both of them. Don’t ever let a weakness of yours or anyone around you become an excuse for not achieving your goals.
Lean Principle - Stop Work (Until Problems Are Corrected)
All construction projects will run into some degree of problems. It is how the project team chooses to manage these problems that ultimately determines the outcome of the project.
Bill Walsh - Planning the First 25 Plays
Construction success depends on both the ability to rigorously plan as well as the ability to quickly react to changing field conditions. This is similar to sports and a lot can be learned from the disciplines of great coaches.