In this issue…
Project management is a HUGE topic so today we’ll limit ourselves to the portion we call Production Management.
Residential CI companies are actually two companies: a Sales company that proposes solutions, and a Production company that implements those solutions in the client’s home.
Production Management oversees & coordinates the execution of a project. Very importantly, they must keep track of what goods and services are delivered to projects, and when, and how much those delivered items are worth.
And right away we see companies failing to properly manage production. Instead of invoicing the items and hours as they are delivered to a project, they invoice for amounts that match the money they’ve received, or are asking to receive. Or they invoice a % of the project each month, emulating the way a contractor might invoice a construction project.
Did you ever try delivering 30% of a TV?
Production-based Invoicing & Reporting
Once you’ve developed a proposed solution for a new project, you are immediately set up to invoice goods and hours as they are delivered to the job site. The proposal – which we refer to as a JOB Estimate in QuickBooks – specifies the items and hours. You simply progress invoice delivered items & hours from the estimate. Just like that, QB becomes a definitive source for essential project information…
What’s been ordered for a project; what’s been received
How much money has been received for a project; who owes who how much
Which items have been delivered to a job, and the value claimed as income
How many of the estimated hours for a project have been used; how many remain
The total value of yet-to-be-completed work on every project under contract
That last item is a big one. We call it the “production pipeline”. During this week’s “3rd Thursday” webinar, we’ll describe how valuable that info can be for maximizing production revenues each and every month.
It’s a Process, not a Program
Everything we’ve described can be accomplished in QuickBooks, no additional software required. Now…
That’s not to say that QB is the only or best software you need. It’s to say that adopting this process doesn’t require new software. It simply requires you learning how to do it. That’s something we’ve been helping dealers with for 14 years.
www.bi4ci.com Visit our website. Sign up for the free monthly webinars. Check out the informative webinars on the Bi4Ci Channel. And consider signing up for a program that can get you set-up and coached-up on smarter pricing strategies and more efficient production management. We call it “Bi4Ci +Coaching”, and it includes the monthly dashboards that show you exactly how well you’re doing, and how much you can improve.
And it’s only $700/month – about the price of a part-time, $12/hour employee. Except this program can help your company make an additional 5 points of profit. In a $2M company, that’s an additional $100K year. And, it won’t call in sick.