Managing cash flow is a constant problem for every contractor. Making sure that you have cash flowing constantly is crucial to your business. It’s important for contractors to know where their money is in order to be successful. Being able to recognize cash flow mistakes and address them in a timely manner could be the difference between your business surviving and not.
Cash flow mistakes
Lost or late paperwork
The biggest mistake that contractors make is not collecting the right paperwork in a timely manner or not doing it at all. Many times change orders are collected on a form and hand delivered to the office once a week or once a month. It’s easy for those forms to be misplaced or forgotten about, if they are even written down at all. It’s crucial to get change orders to the office as quickly as possible to ensure that they are paid.
Another issue that effects cash flow is collecting invoices from customers. It’s important to have a system to keep track of all of your customer information, to make sure it is accurate and up to date. You don’t want to be waiting on an invoice to be paid only to find out it was mailed to the wrong contact or address and subsequently returned.
Paying vendors too early
It’s not always possible to get paid enough upfront to start a job, however that doesn’t mean that you have to bear the financial burden either. Setting up accounts with your vendors will help you keep the financial burden off of you, allowing you to keep the job moving and keep your cash in house. Make sure that you are setting up payment terms that allow you to collect before you pay out.
It’s important for any business to have goals that are aligned across all departments, especially sales and finance. It’s so crucial for both sides to know what the other one is doing. When you don’t have this communication your cash flow will be greatly affected.
Salespeople have one goal in mind: make the sale. They will do whatever they need to do to close a deal. Finance people are more focused on the business as a whole and keeping everything organized and accounted for. While both are necessary to any construction business, it’s also necessary for them to communicate what both sides are doing, while keeping the overall goals of the business in mind.
The best solution for keeping track of your cash flow as well as jobs, change orders, customer information and invoices is an end-to-end construction accounting software package. Including a mobile option in your software will ensure that your contractors are doing their job in the most efficient way possible by submitting change orders on the spot, rather than waiting to return paperwork to the office.
The right software package will keep all of your employees on the same page, providing project managers with the tools that they need to oversee their jobs and providing management with tools that they need to keep track of the business as a whole, all from one screen.
STRUCTURE Blue is that end-to-end solution that you are looking for. For over 40 years C/F Data Systems has been serving the construction industry with solutions that address contractor’s unique financial needs. STRUCTURE Blue provides solutions to manage all areas of construction operations including billing, inventory, payroll and project management.
STRUCTURE Blue also has a mobile option to keep your employees connected in the field. The STRUCTURE Mobile suite app ChangeLinc allows you to create change order requests directly from your mobile device in the field and email proposals to customers instantly.
With a secure login, each field supervisor or project manager can access all of their specific job information. From the field, access any of the jobs that you are working on to create change orders.
The STRUCTURE Mobile suite also includes TechLinc which lets you dispatch service calls directly to field service techs. In the field, the tech can access service history, get directions, enter a description and capture a digital signature.
With TechLinc you no longer have to wait days to bill a customer, now you can do it almost instantly. Once the tech completes the call, the customer instantly receives a signed copy of the work order via email. All of the details sync with STRUCTURE Blue, ready to be reviewed by the billing department.