COVID-19 Management Guide for Construction Companies. Hope is not a strategy.
Be proactive in uncertain times, don’t become a COVID-19 statistic.
Anterra has the tools you need to manage budgets reforecasts, including AR Collections, and cash management.
Manage your Cash and Cash Flow with Anterra
AR Collection Management
Anterra’s AR Collection Management System gets you out of spreadsheets. Collectors can call customers with zero preparation time, they see all open invoices for a customer in a hub.
Collectors manage AR Action Items that are scheduled out on a calendar, their days are planned in advance.
You can stop the internal calls to collectors, the collection status and notes appear on your Aged AR Invoice Grid and are visible to anyone that has security access.
Full details of AR Collections can be found our our AR Collections Product Page, Click Here to go to our AR Collections Management page.
Job Cash Backlog / Months of G & A (Overhead) Coverage
Construction companies went out of business in the Great Recession due to a cash shortfall, not necessarily a lack of work. The companies that survived had less work but managed their cash through the downturn.
Your income statement has the following information each month
WIP Adjusted Revenue
LESS WIP Adjusted Cost
= WIP Adjusted Gross Margin
LESS G & A Costs
= Net Income
That’s accounting NOT Cash Flow. You’ve likely cut down some overhead costs since the COVID-19 quarantine started, especially if your area has shut down construction.
You need to know the number of months of Overhead your JOB CASH BACKLOG covers.
Anterra has the reports you need to get visibility into your Job Cash Backlog and your Fixed and Variable Overhead. Contact Us to get these vital tools today.
You won't get paid if you don't get your invoices out the door
- Last Invoice Date
- Days since last invoice
- Costs since Last Invoice Date
For the service side of your business you need to identify the work orders that are completed but not invoiced.
Anterra shows you these metrics so your billing team stays on top of their game. Very few customers pay you without getting an invoice, get yours out the door asap.
Know your Customer and Revenue Exposure to COVID-19
If your customers have closed or reduced operations due to COVID-19 you need to assess the impact on your business.
With Anterra you can understand:
Your AR Exposure – Write Offs may be coming!
Anterra is able to send your customer list through a data service to determine their Standard Industry Classification (SIC) Codes. You can then create your own classifications (i.e. group Hotels, Gyms and Hair Salons into “Hospitality”) and we can upload them into Anterra. Using our standard AR grids you can then pivot and summarize your exposure to businesses that will either be slow paying or may go bankrupt. You can then segregate your AR to understand its collectabilty.
Your Trailing 12 Month Revenue Exposure – Needed to Prepare a COVID-19 Budget Reforecast
Based on your classification of customers Anterra has a trailing 12 month revenue report. You should apply a reduction factor for the remainder of 2020 when you prepare your 2020 COVID-19 GL Budget. You will be able to compare multiple budgets to each other in Anterra. We recommend you start with your best guess for your base case, analyze that, then prepare upside and downside budgets when you have available time.
Redo Your 2020 Budget Now
Start with a Base Case 2020 Budget
Trust your instincts and prepare a monthly budget of revenue and expenses for the remainder of the year. If you find that entering the budget in your accounting system is hard we can send an Excel import template to load your budget directly into Anterra.
Use your 2020 COVID-19 Base Case to Project the Rest of the Year and Compare it to Your Original 2020 Budget
With your budget in Anterra you can project the rest of the year, we add actual results to the last closed month with the remaining months of your 2020 COVID-19 Base Case Budget. The difference is the effect of COVID-19 on your business.
Prepare for the worst, do a downside budget
Anterra can compare multiple budget scenarios. By comparing your 2020 Projection with your 2020 Original Budget and your Upside and Downside Budgets you have the full picture to take action to succeed in this challenging environment.
manage through challenging times.