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.  




Building an Effective Preconstruction Team
Your precon team is your company from the perspective of the project owner. Put your best foot forward by selecting the right people in the right roles at the right stage of the project.
Business Operating System
Contractors must have a clear vision with specific goals. It is the strength of the business operating layer of their companies that will keep them on track to achieve those goals.
Cash Flow Tip 17 - Cascading Reporting Systems
Developing rigorous weekly Operating Rhythms in your business will help everything run smoother just like they do at the project level.