Cash Flow Tip 5 - Flowchart Your Cash Flow

Flowchart your cash flow process specific to each project.

D. Brown Management Profile Picture
Share

You can only see the full value-stream of cash flow, the waste, the people and the opportunities for improvement by mapping out every step. 

Cash Flow: Tip 5 Flowchart Your Cash Flow Process - Project Specific
  • Look beyond your functional area inside the company.  Who is EVERYONE in your company that is involved in the cash flow process?  
  • Look upstream to your customer.  Who do you send your progress billing to?  When? What happens to it from there?
  • Does your customer getting paid (Pay When Paid) impact your payment?  If so map out the people and processes at your customer’s customer.  
  • Look downstream if applicable to your vendors and subcontractors.  What do you need from them to ensure optimum cash flow? This might include their progress billings, change orders, lien releases and compliance documents?
  • Who else is involved that can influence the process?  This might be a outside inspector, auditor or compliance officer.  
  • What happens in the process if there is a problem along the way?  Map out those details and decision trees as well.  

Now start looking for opportunities to improve the flow through this map.  Even within your company ask yourself whether the flow is making optimal use of everyone’s time.  

Imagine trying to troubleshoot something in a building without having a set of plans.  That’s what trying to improve cash flow is like without a flowchart like this.  

We are revamping our publicly available cash flow workshop that includes these 18 tactics that contractors can use to accelerate cash flow. Stay informed of updates on release.


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....

Accurate Projections - The Tale of Two Project Managers
Few things will improve operational execution for contractors faster than a rigorous project review and projection process. Projections are really just continuous planning, learning, refining and adjusting.
Plan Ahead, Adjust Early, and Accelerate Recovery
Construction in any given industry sector or geographical area is a cyclical business. There are four major levers a contractor can pull to ensure the business performs well throughout all economic cycles.
Cash Flow Tip 8 - Subcontractor and Vendor Terms and Pay Schedules
As important as it is for you to have a great Schedule-of-Values (SOV) with your customer, it is equally important to have great terms with your subs and vendors.