“I consulted with Fred at Ionji while setting up my WBE, llc to make sure I had my financial metrics in place to manage the expansion in my company and bid on larger state contract projects.”
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Cash Flow Management in Construction Industry: 3 Proven Strategies
1. Get Retainage Released
In construction, the client often gets to keep 5 to 10% of the contract, ultimately released at the end of the project. A typical construction business operates at cost during the project lifecycle. This means that profit is earned at the release of retainage. 2. Speed Up the Accounts Receivable Process
On average, the payment time frame in construction is 60 to 90 days. Make it a goal to cut down this number by 30 days.
3. Boost Your Analysis and Forecasting Skills with Cash Flow Analysis
Don’t spend all of your time on income statements and balance sheets. An understanding of future cash flow is equally important.