“The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality.”
Author: Chris Chocola
Plan your projects backward
I know this sounds unorthodox and seemingly time-consuming, but if you begin your process planning with the last step at the beginning of your new year, you usually end up with excellent results, which is that feeling in your gut that your numbers just aren’t adding up- there are those little unforeseen costs that crept into your strategically planned project budget. If this sounds familiar, consider these planning tips:
Tweet: Companies need to make tracking cash flow a priority, and cash flow projections are a big part of that
12-month rolling cash flow forecast
“Companies need to make tracking cash flow a priority, and cash flow projections are a big part of that,” according to Calvin Harris Jr who works as a strategic adviser and financial consultant for many small businesses. “Often when business owners first start working on a cash projection, they realize how difficult it can be to predict into the future. The good news with projections, though, is they get much easier to update over time.”
Maintaining a healthy cash flow requires long-term vision. The 12-month Rolling Cash Flow Forecast, offers a more in-depth view of your finances and provides answers to more “what if” questions. This gives the business owner the ability to predict cash flow problems and the time needed to avoid such problems.
You should have an eye on the overall well-being of your project. It contributes to the successful running of a business if the CFO has a rigorous process plan in place to track expenses on a monthly basis and to project future expenses for the months ahead.
Procurementexpress.com can help you keep track of every breath taken by your project. Our smart spend management process will make sure you have more time on hands to spend on projecting a more accurate spending forecast of your budget.
Pay attention to your expenses
On June 11, 2015 Calvin Harris Jr., a certified public accountant and president of change management with Harvin Consulting in Columbia, MD said “Many companies simply don’t pay enough attention to how much they pay for certain expenses. Business owners see the money coming in, but don’t realize just how much goes right back out the door.”
Resolve your cash flow shortages before they happen, keep a close eye on every purchase made in your project structure. Make sure every staff member knows the procedure of reporting every purchase made.
The project manager should process a change order immediately.That money needs to be obtained quickly as it will have a positive impact on your cash flow.
With the ProcurementExpress.com app, there is no space for pitfalls as you can instantly see what your costs are with the press of a few buttons. The live information ProcurementExpress.com app helps your company achieve sustainable growth through efficient spending- management.
Consistency in employee performance
You will get higher quality results from rehiring reliable employees for similar projects or by employing them permanently. By re-employing employees, you’re minimizing the odds of accidents and project setbacks and increasing the likelihood of repeat business. Employees already know your procedures and communication flow is more comfortable. They also understand the role they play within the team and in keeping their part of the process functioning well which helps the overall project to be completed efficiently.
Procurementexpress.com is a straightforward, easy to use application that anyone of your staff members can master in a few minutes. We achieve this by running all purchases through a set approval routing by budget and project.
Train your project manager on cash flow management
Cash flow provides an idea about your company’s real financial well-being. In construction, 85% of cash comes from project work in progress, which means cash flow performance depends on the project manager’s cash flow management.
Setting goals for example ‘sales outstanding’ on a daily basis increases the odds of success.
The average time it takes to get paid in construction is between 60 and 90 days. Strongly consider setting a realistic goal to reduce that number to 50 days. You can do this by offering payment incentives, writing clear terms, checking credit reports prior to making any deals, and restructuring terms with non-payers.
Send automated invoices immediately. All invoices should be sent as soon as possible. If you want to maximize cash flow potential, send invoices ahead of time.
With the Procurementexpress.com purchase order management app all purchases are run through a set approval routing process, whereby managers who make the decisions can approve all purchases with the click of a button.
We save you time by same day implementation. No training is required so all your departments can use our service. We have an award winning concierge support team available 24 hours a day. Our system is also adaptable with tailored reports and a fully customizable Pdfs.
By using our live information app we control your budget while you run your Construction Project with ease.You will have the time to focus on keeping CFO fit – our app will instantly send you purchase requests as they happen.
Successful trading means making the right decisions. An experienced lead cost controller will know the significance of progress and its overall effect on the project. Taking a serious interest in the spend rate is a given.
