Changes and Cash Flow Improvement

Construction is a cash-intensive business and change orders are often one of the root causes of poor cash flow.

D. Brown Management

March 13, 2019 2 minute read

A 30-day improvement to change management workflow can generate over $400K in additional cash flow for a $50M contractor.

Change Management: Changes, how much cash flow improvement?

Construction projects average 10% in changes.
Attention to details on pricing can significantly improve change profitability by accounting for many of the hidden impacts that changes cause.

Nearly all projects face difficult cash flow, even before adding in changes.
Getting changes onto the billings ASAP is critical. Remember that an improvement of just one billing cycle on average is worth hundreds of thousands of dollars in cash flow.

HOW? Look at every detail of the workflow.

Could we have identified this any earlier?
Could we have priced it and made a proposal any quicker?
Could we have leveraged our customer relationships to get it processed any faster?
How many of the T&M changes could we have quantified ahead of time to accelerate the process?
Could our backup information be any clearer so that processing moves faster?
Could our contractual terms have been improved to help?

Changes and Cash Flow Improvement

Change orders are a fact of life in construction. Improve profitability, cash flow and customer satisfaction by effectively managing changes. Build a foundation for success with 12 steps to improve pricing and 11 negotiating strategies for the whole project team....

Previous Next Go To Series

Related Insights Series

Related Training

Changes and Cash Flow Improvement

Previous Next Go To Series

Related Insights Series

Two Critical Things Every Business Must Do

The business of construction is both challenging and exciting, with days full of risks and rewards. Jack Stack calls it “The Great Game of Business,” where he describes how to create a culture of ownership.

cash flow scoreboard sustainable growth wisdom

Change Management Dashboards

Summarize your detailed change tracking logs with concise dashboards that give you critical information in a format that allows you to see the big picture while still having enough information to be actionable.

business management change management process standardization project management technology

Owner Occupied Real Estate for Contractors - Lease or Buy?

There isn't a simple answer to this question. Much of the advice you will get has bias attached. Start your decision making process by building your own models and making general assumptions while looking into the future. Use this Excel model to start.

business management business planning financial management