Cash measurements and accountability
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Cash, Measurements and Accountability. Business Mentors. Measurements. Role of objective measurements in management Growth without measurement Foundation Measurement Tools JPP Accounting program Xactimate. Database Programs. ACT Chronicle JPP Access. Accounting. QuickBooks PSA

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Presentation Transcript

Measurements
Measurements

  • Role of objective measurements in management

    • Growth without measurement

    • Foundation

  • Measurement Tools

    • JPP

    • Accounting program

    • Xactimate


Database programs
Database Programs

  • ACT

  • Chronicle

  • JPP

  • Access


Accounting
Accounting

  • QuickBooks

  • PSA

  • Master Builder

  • Timberline

  • A-System

  • MAS 90


Estimating
Estimating

  • Xactimate

  • Blue book

  • Boeck


Database program
Database program

  • Purpose

    • Measure job status and progress

    • Track sales and estimates

    • Track marketing and link to jobs


Accounting1
Accounting

  • Profit and Loss

    • WIP

    • Accrual

    • Standard chart of accounts

    • Depreciation


Accounting reports
Accounting Reports

  • Balance Sheet

    • What you owe, what you own and capital investments

    • Key ratios

      • Current

      • Debt to Equity


Key measurements
Key Measurements

  • Job Costing

    • By individual

    • By job type

    • In progress

    • Completed

  • Sales

    • By job type

    • By individual

    • Compare to goals


The king
The King!

  • Cash

    • Weekly cash projections

    • A/R Reports weekly at least

    • Measure turns and compare to goals

    • Collect from a position of strength

    • Manage and budget capital purchases

    • Where do profits go?


Managing the cash crunch
Managing the Cash Crunch

  • Start with a budget

  • Short cuts and Let cash drive your plan

    • Buy or sell to business weakness

    • Equity partner

    • Banking relationship

    • Cash dance


Strategies for speeding cash
Strategies for Speeding Cash

  • Ask and Collecting from strength

  • Types of jobs

  • Have a cash plan for jobs and implement

    • All have some downside

  • Close jobs

  • Manage the schedule - Deposits and deductible

  • Billing and invoicing

  • Profitability

  • Subcontractors and materials


Banking relationship
Banking Relationship

  • Reality of cash in restoration

    • A/P and payroll - 30 days or less

    • A/R 40 days and over depending on the company


Banks
Banks

  • Where is there money?

    • Understand your financials - esp Balance Sheet -the bankers do

    • Accurate and timely financials

  • Won’t lend $ when you need it

  • Track record and consistency

  • Relationship built on trust


Your banker your partner
Your Banker - Your Partner

  • Educate on Business

    • Growth plan and strategy

    • Vision

    • Risks

    • Margins and potential

    • What you will do with the funds

    • Difference from the construction industry


What do you want
What do you want?

  • Use your loan - dedicated funds

  • Not for capital purchase

  • Operational cash

    • 30 days revenue

    • 80% of current receivables


Capital expenses and cash
Capital Expenses and Cash

  • Stick to your budget

  • Understand the ROI

  • Rent

  • Lease

  • Bank Financing - not operating line


Accountability
Accountability

  • Subjective vs Objective

  • Clear Expectations

  • Be accountable for your communications

  • When, where and how do measurements take place


What to measure
What to Measure

  • Sales

  • Invoicing

  • Cash

  • Customer service - every job

  • Gross Profit

  • Breakeven


Figuring breakeven
Figuring Breakeven

  • BE = overhead/GP

  • Example

    $100,000 overhead

    50% GP

    $200,000 sales


Sales
Sales

  • Start with a goal - definition

  • Individual

  • Division and work type

  • Include change orders and supplements

  • Review every week

  • Sales meeting


Invoicing
Invoicing

  • Focus on Revenue generation

  • Complete jobs timely

  • Measure weekly

  • Leads to cash generation and profits

  • Quantifies production


Cash

  • Weekly barometer

  • Payroll, A/P

  • Needs and targets

  • Budgets and expectations


Customer service
Customer Service

  • Most important measurement in company

  • Start with training and strategy - Strategies for Success class

  • Post job survey

  • Progress calls

  • Visit jobs - Trust but verify

  • Quantify measurements and celebrate success


Gross profit
Gross Profit

  • Budget

  • Measure in progress

  • Accounting function

  • Weekly in progress

  • Monthly completed jobs

  • Sort by estimator and job type


Improving margins
Improving Margins

  • Travel

  • Materials

  • Shop time

  • Poor project management

  • Completion

  • Not always the estimate


Accountability1
Accountability

  • Clear expectations

  • Frequent feedback

    • Formal

    • Informal

  • Fair and consistent

  • Based on Objective measurements


Employee profiling
Employee Profiling

Where are you putting your effort?

  • Stars

  • Shooting stars

  • Falling stars


Accountability tools
Accountability Tools

  • Put resources toward opportunity rather than problems

  • Coaching for performance

  • Be fair, timely and consistent

  • Should not be a surprise


Putting it all together
Putting it all Together

  • Timely and accurate measurements

  • Clear communications

  • Accurate timely information

  • Cannot growth without good reporting

  • Build your company around a good office manager

  • Know your baseline numbers

  • Know the industry expectations


Tips for success
Tips for Success

  • Make adjustments

  • Get out of the trenches - use the talents of your team

  • Plan and communicate

  • Requires objective measurements


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