Cash Flow Metrics and The Continuous Improvement Process

Contractors can focus on 3 major metrics to continuously improve cash flow, truly making a “game” out of it.

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Cash Flow: Cash Flow Metrics and the Continuous Improvement Process.

Contractors can focus on 3 major metrics to continuously improve cash flow, truly making a “game” out of it.  

  • Cash Metric Trend: This is the ultimate outcome-based cash metric at the company level that operations has control over. It looks at your open Work-in-Progress (WIP) projects and compares the net cash against the earned gross margin. Below 100% and you are financing the construction of the project.  
  • Over / (Under) Billing Trend: A great leading measure and 100% within the control of the project management team utilizing the 18 tips.
  • Collections & Retention Trend: Another leading measure that is a joint responsibility of the project management and finance team.  
  • Identifying the TOP 3 jobs that are the biggest drivers of these lead measures over the last month and then drilling down into them using Root Cause Analysis (RCA) tools to help you see potential improvements.  
  • Prioritize and execute improvements in the short and long term. Get better during the next cycle just like you do with Field Productivity.
  • Utilize A3 Thinking / Reporting techniques for the best results.

Contact us about using a template and process like this for your business.  




Two Key Results for Project Planning
There are two critical key results that should be focused on as part of every project planning process.
Managing Communications During the Preconstruction Process
Customer satisfaction and project success is largely determined by how effective the communications are managed during the preconstruction process.
Using a Vision to Create Desire and Context for Tasks
There is a whole lot of work involved in building projects and building a construction company. It is easy to get mired down in endless to-do lists, processes, and problems. The thing that holds this all together and accelerates performance is the vision.