Managing cash flow is one of the biggest challenges that plague the construction industry. Regardless of company size, cash flow can get out of hand quickly if contractors are not staying on top of things.
Whether or not a construction firm or independent contractor has implemented a software system or not, they still risk the chance that they could be missing reporting tools to effectively manage their cash flows. Such vulnerabilities, and the inevitability of human error could mean the difference in a profitable company or the risk of business failure.
Our experienced and construction-oriented employees bring decades of knowledge to our ProjectPro team. We have seen and worked through every common cash flow mistake, including software related malfunctions. We understand how costly it can be to have downtime in the construction industry and work diligently to ensure you are not experiencing unnecessary down time.
Lost, Late, or No Paperwork
The primary and most significant mistake we come across is forgetting the importance of paperwork. Whether it is delayed paperwork, no paperwork, or lost documents; you never want to have a situation where change orders are written up but are not properly delivered to the office or executed by the appropriate people.
It is crucial that Change Order related documents must reach the office as soon as possible to reduce the time it takes for execution and related billing. Cash flow is not only related to cost management, billing management is equally as important. Companies can find themselves in a tough spot if they are not able to submit progress billing or they find themselves revising billings due too inaccurate change order documentation.
Another thing that might hinder cash flow is errors in invoicing. Contractors and their office personnel need to keep customer data up to date and organized. If not, billings can find themselves at the wrong address, or directed to the wrong person causing rejections, and delays in receiving payment.
Early Vendor Payments
Most times there is little leniency in invoicing a project prior to the start date. However, most times it is necessary to purchase materials ahead of time. To avoid a situation where you are laying out exorbitant amounts of cash, it is important to properly set up vendors and avoid early payments. ProjectPro gives you the ability to set up “pay when paid” terms with vendors, ensuring you are balancing your cash outflows with your cash inflows.
Whether you are in the construction industry, or any other industry, coordination between departments is necessary to maintain control over projects. Constant communication not only keeps all teams in sync but helps improve the cash flow.
, if the sales team has made commitments to certain terms or offers a discount, and does not communicate this to the finance team, you can find yourself in a situation where billings are rejected, and you are seeing delays in receiving payment.
Likewise, if there is changes to the scope of work or materials needed, and a project manager does not communicate this to the purchasing department, you can find yourself in a situation were you are on hold due too insufficient materials. Project delays can prove very costly to companies and is an area where profit can be lost easily. Working on integrated construction management software Improves each departments ability to locate information, review documentation and increase cohesiveness throughout the company.
Finding The Solution: How ProjectPro Could Help?
Implementing an integrated construction management software will help you gain maximum control over change orders, labor activities, and client data, resulting in improved cash flows.
Since a cloud-based solution gives you mobile access to all the project data; submitting forms, documents, and other information is quick and hassle-free
In other words, using the right technology will help office personnel and project managers stay on the same page; leading to more efficient document processing and an overall easier experience for your own company, and your customers.
ProjectPro not only offers standard construction management tools, but the ability to customize any area that is unique to your company. Whether you are looking for process improvement related to billing, inventory management, payroll, job costing, or project management, ProjectPro can do it all. We provide you training and support every step of the way, to ensure you are able to not only save time, but improve communication and cash flow.
Having trouble managing change order requests or anything else that affects your cash flow? Let us help you take control of your business and make your on-site crews jobs a bit easier at the same time.
For more information and a free demo, Contact us today.