Few field services businesses lack discipline. Just consider the extensive scheduling and planning required to keep any job on-time and on-budget.
Put that discipline to work and make a commitment to also stick to cash flow best practices.
An article on the Construction Executive website highlights five tips to create working capital and maintain control of cash flow:
- Get into the field: Put a time and billing system where your projects are happening: the field. Make sure you collect time, material and expenses at the point of service. There are a lot of job sites, so make sure all your technicians are collecting data.
The faster the supporting service transactions can flow into the financials, the timelier your reporting will be. To do this, your work order, project management and job costing systems have to integrate to the corporate inventory, accounts receivable, accounts payable and payroll systems.
- Control your payments: Delay payments whenever possible without paying late when cash is tight. On the flip side, when you have cash on hand, take advantage of deals that reward early payment with discounts.
- Trim monthly costs: As the Construction Executive article suggests, cut down on expenses by targeting recurring costs.
- Look for additional financial resources: Line up financing sources for unplanned expenses and important investments.
- Monitor your incoming income: You do have control here. Clearly state payment terms and stick to them.
Over time, procedures like these will become routine, and your company will be in a position to say “yes” to whatever great opportunity comes its way.
Source: Construction Executive, September 2012