Over and Under Billing Metric Trend

Contractors looking for key metrics to manage should be focused on Outcomes or Key Results, and Lead Measures or Leading Activities.

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D. Brown Management
November 11, 2018 2 minute read
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Cash Flow: Over / (Under) Billing Trend.
  • OUTCOMES: Or Key Results. What metric(s) will best show the final state you want to be in AND progress toward that target level of performance?
  • LEAD MEASURES: Or Leading Activities that will most likely lead to the Key Results or Outcomes you want. The metrics that measure the Leading Activities are typically at a more rapid cycle time than the outcome based metric.  

At the cash flow level, if you want to improve your Cash Metric to 100% or better, the first activity that must be controlled is the monthly billing performance of the projects.  

No amount of excellence in collections will help you get close to 100% if you are continuously under-billed on your Work-in-Progress (WIP) as a whole.

Metrics alone WILL NOT change your outcomes; they will simply let you know the score. The most important aspect of this is the regular Operating Rhythm that reinforces a rigorous PDCA cycle each period, similar to what the Last Planner System does at the project level.

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....
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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....
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