This article had some decent advice on how to keep project cash positive. The key steps they recommend are:
- Build Strong Relationships – business runs better with relationships! Make this a priority!
- Have a documented system for collections – collections are not just the Accounting staff. The PM has the relationship so use that to your advantage!
- Proactively Manage Schedule of Values – If you can get a down payment, do so! Then, make sure you are setting the schedule of values to your advantage so you don’t have to be the bank for the client!
- Recognize and Process Changes Quickly – Obviously, you have to consider the client when deciding “When” is the right time to send a change request; however, when you have sent one, make sure you are billing promptly.
- Get Yourself into a Secure Position – this is really about leans on the property and every state is different. Some of you have to file an intention of lean within a certain time frame of the project initiation or you cannot file. Make sure you know the rules and use them to your advantage.
- Be Prompt with Punch Lists – This one can burn you for sure. If you move on to your next project and don’t focus on the punch list you will have your final billing and retainage likely still hanging out there for months!
If you would like to discuss other ideas for good project management, consider joining one of our Exotek Peer Groups.