Every construction company has work backlog but lacks an understanding of how it will spread out over future months. It is impossible to predict work surpluses and shortages in the future without timing out revenue and costs. Anterra is releasing a revolutionary feature in 2020 – Job Margin and Cash Forecasting.
As part of a project managers forecasting process they will time out contract revenue and costs in their choice of groupings of contract schedule of value items and their choice of level of job cost forecasts. Future month amounts can be entered and spread in dollars or percentages. This will give you a Gross Margin Forecast.
Anterra will automatically convert your Gross Margin Forecast into a Cash Flow Forecast. We know the customer’s average days to pay to time out cash receipts. We also know the percentage of the forecast cost at complete that is labor (cash is expended in the month it is incurred), material (cash expended 30 days after expense is incurred), subcontract (paid when paid), equipment and other costs. This Cash Flow Forecast will tell you of upcoming cash surpluses and droughts allowing you to hold onto or disperse cash as required.
Our next step will be comparing your forecast gross margin to your GL budgeted margin, the difference is work you need to win to make budget. We will then add a bid job upload where you define jobs you bid on with contract value, start date, duration, job type and probability of winning the bid. Taken all together you will have a windshield view of your business instead of the rearview mirror you have today.
Watch this space as we update our development during 2020.
See how online Job Cash Forecasting can work for your team.