Can small adjustments create big changes in your business?

Posted by on Feb 6, 2013 | 0 comments

I was recently reviewing some cash flow statistics with one of my clients because they had noticed that their collections days were much slower than the average for their industry.  When I pointed this out, they were concerned, and we looked at why this could be happening.  After reviewing a few things, we made some changes in their collections process.  You see, they were calling regularly (as they should be) to collect anything that was over 30 days, but in their industry, it is quite common to collect retainers.  That was the part they were totally ignoring.  Their retainer amounts were very insignificant as compared to the total job cost, so we recommended that they change by collecting 50% of the estimated job cost as a retainer up front.  By implementing that one change, they were able to improve their accounts receivable days by over 30 % in just one quarter’s time.  This is just one way we like to help our clients see where their ratios are in comparison to their industries, and help them get in line, or even improve upon industry averages.Terri Davis working

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