Managing cash flow in a business is tough enough, but for companies in the construction field, it is even tougher. Inventory and expenses can be tied up in projects for months, and multiple ongoing projects can make accurate accounting a challenge, to say the least. Stephanie Gaydosik, CFO of ProTouch Restoration, a full-service restoration contracting company headquartered in Cincinnati, found cash flow fluctuations were intensified with insurance-related work. “We knew we had to have a solid way to manage our cash flow,” she said. “We had to be able to know in real time how much we had invested in our ongoing projects.” The answer was to convert the system to reflect the expenses for work that was currently in progress, and she shared her solution with attendees at Best of Success in a presentation titled “How We Use Work-in-Progress Billing to Manage Cash Flow and Expenses.”
“Wouldn’t you love to have a way to forecast cash flow fluctuations before they happen?” she asked the audience. “You’ll be able to do that with work-in-progress billing, or WIP.”