Many contractors struggle with cash flow - juggling payments due with revenue received - and often come up short. It seems to be the nature of the beast.  If you’re in this situation and want to effectively change it, you need to explore the benefits of construction software reporting.  Here are five compelling reasons to consider:

1. - Analyze Cash Flow by Job - One bad job can lead to huge financial problems. As jobs progress, it becomes critically important to be able to monitor how much cash is going out and how much cash is coming in. Imagine having all of this data available - in real time - for each job.

2. -  Monitor Over/Under Billings - Monitoring over/under billings is the key to maintaining a positive cash flow on your jobs. The ability to calculate these amounts quickly, accurately and easily means you can see a cash flow crisis before it actually happens.

3. - Committed Cost - Early estimates make a direct impact on staying on or under budget. That being said, you must include committed cost.  Why? Because even if you haven’t been invoiced for POs or subcontracts, these commitments need to be viewed as future cost. Wouldn’t it be nice to know exactly how much cash you’ll need in the future?

4. - Measure Profit Fade - The profit calculated when bidding a job can fluctuate dramatically as the project progresses. Change orders might bump profit and a poor estimate might hurt it. Measuring the profit fade per job (in real time) gives you the ability to make corrections before it’s too late.   For example, if the value of your contract does not increase incrementally with cost, you need to identify why.

5. - Monitor Backlog - It’s the crystal ball you’ve always wanted! It’s true - your backlog can help you estimate what your cash flow situation might be in the future. Monitoring estimates-to-complete for earnings, cost and profit will put a dollar amount on your backlog. Whether you’re projecting growth or preparing for slow times, you won’t be stuck in a negative cash flow situation.

With the right construction software, all of the data should be at your fingertips at all times. If not, it’s time to think about making some changes. Register to view AccuBuild sample reports here.