It is nearly impossible for a contractor to have consistently great cash flow if they have a Schedule-of-Values (SOV) that isn’t loaded properly and integrated with the project schedule, including a projection of the project cash flow.
With that in mind, consider the Leading Activities and Measurements that will let you know how this is going:
TARGET: We want to have an effectively loaded SOV that is approved by the customer and has a cash flow projection for all projects over $_______ in revenue before the project starts.
- How many jobs had their first field labor costs that were over $_______ in revenue indicating project starts?
- Of those, how many had both (1) a customer approved SOV and (2) a cash flow projection based on that SOV, budget, and project schedule that were reviewed with the PMs manager or finance?
- Like measuring Percent Planned Complete (PPC) on a project, the target is 100% and misses should be analyzed so the team can learn.
- Of those cash flow projections completed and looking at the first 3 months of the project, what was both the percent over / (under) billed compared to the projected earned revenue during that period? How much is that expressed in dollars?