06/16/15 " Elements of Cash Flow and Getting Paid"
As the economy strengthens the risk of failure to a construction company due to cash flow issues accelerates. Dave Berry, a Consultant with FMI, outlined the strategies necessary to protect our cash at a joint meeting of the CFMA of Massachusetts and the Associated Subcontractors of Massachusetts.
As margins continue to be tight (1-2% for GCs over the past 4 years) the cash flow cycle and receivables processes are critical to survival and growth for all construction companies. Getting paid timely, and in full directly impacts a project’s success. Mastering the major components of analyzing financial statements, tracking cash conversion periods, deciding when and if to borrow are the key elements to keeping working capital at adequate levels and protecting your bonding capacity.
A CFM’s biggest asset and risk is his/hers’ accounts receivable. To best manage this Project Managers need to be educated to play a key role in the billing/collection cycle. This cycle starts with doing your homework in the pre-bid and pre-construction process; instilling the discipline necessary to establish a company-wide, formal, process from performing work through the billing process and finally getting paid. Key elements in the cycle; getting change orders processed and paid per contract, billing aggressively with retainage in mind, reviewing all jobs that are under billed; net under billings should not exceed 10 days of sales; and obtain authorized approval prior to billing to ensure smooth acceptance, industry average for payment is now at 55 days.
05/12/15 " New Understandings of Leadership "
For the May meeting the Education Committee of CFMA Massachusetts presented the topic “New Understandings of Leadership”. The May meeting has traditionally been when the Chapter scholarships are awarded and the speaker for that meeting has been someone who has been able to leave both award recipients and attendees with a unique message regarding the topic of leadership.
This years’ presenter was Howie Carr, syndicated radio talk show host, journalist and political columnist. Known for his scathing exposes of local politicians, he has raised lots of eyebrows and voices over the years. He has interviewed numerous politicians, authors and celebrities, and is not afraid to ask those “no comment” questions. Pulling from background research used in his two New York Times best-sellers Howie entertained the attendees with his observations of what leadership means in the local and national political arena