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?

Change Orders

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

Change Orders

Previous Next Go To Series

Related Insights Series

Prepare Your Business - Capital

In times of uncertainty, the best strategy is to do everything possible to preserve your capital and ensure credit will be available as needed.

cash flow COVID-19 leadership

Four Critical Elements of an Effective Task

Maximizing labor productivity starts with defining exactly what needs to be delivered and then breaking it down into tasks that can be effectively managed.

change management foreman training labor productivity project management project planning schedule management

Changes - Early Identification is Always Better

Early identification of changes and conflicts is the first key to success. The capability to identify changes and conflicts early in the process is a combination of organizational structure, systems, management, training, and coaching.

cash flow customer satisfaction estimating foreman training labor productivity preconstruction project management project planning