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Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
Managing cash flow is one of the biggest challenges facing Australian construction companies. You need a steady stream of capital to fund your work, pay your staff, invest in equipment and grow your business, but roadblocks along the way can have you spinning in your tracks.
If this sounds familiar, these seven simple cash flow strategies are for you.
Change orders are part and parcel in construction, however, they usually feel like surprises and can throw your cash flow out of whack.
Implement systems to process change orders quickly. Faster processing leads to more immediate payment and fewer risks to your cash flow. If necessary, give your project managers the power to process changes from the field.
Except when you can secure a discount for paying in cash, consider the option to finance your materials and equipment. Spreading out your costs can make it easier to forecast your expenses, giving you more cash to pay for your daily operations.
A construction company’s cash flow can resemble a roller coaster at times. Without effective financial systems in place, you can quickly lose track of balances and projections, leading to further headaches down the road.
Ask yourself, does your current accounting system allow you to get an accurate snapshot at any given time? How is your project management doing? Can you ascertain the status of various projects without having to get on the phone and ask for updates from multiple people?
Underbillings sabotage the cash flow of too many Australian construction companies, but can be avoided by getting documentation from the field quickly and tracking billing carefully.
We can help you to establish the procedures for gathering timely payments and steadier cash flow. By working toward this goal from multiple angles, you’ll enjoy more predictability and steadiness in your finances.
Tax planning can eliminate unpleasant surprises that derail your cash flow, and allow you to use strategies like deferring tax payments to finish large projects or invest in required capital.
By outsourcing this aspect of your business, you can take advantage of the expertise that keeps you compliant, even when tax laws and regulations change. You’ll also never miss a tax payment, thus avoiding fines that can cut into your available finances.
The cash requirements of construction companies can change from week to week, but with proper management, you know when you’re going to have to place large orders for materials and when you can expect payments for phase completions.
Cash flow projections will help you to keep an eye on future obligations, allowing you to delay purchases and payments when that money is required.
If you’ve struggled with adequate cash flow, consider outsourcing your finance to experts with in-depth knowledge of the construction industry. Focus on what you do best, and leave the time-consuming financial tasks to us. We can manage your commitments, provide accurate reports and help you with future projections and planning. Reach out to us at Altus to learn more.
Set your business on the right path with this simple guide.
Make sure you’re on the right track with this online checklist.
CFO, Construction - 4 min read
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Altus Wealth Pty Limited ABN 55 649 956 212 is an Authorised Representative of Altus Financial Services Pty Ltd ABN 24 637 026 825 an Australian Financial Services Licensee (AFSL no. 520266). Altus Financial Services Pty Ltd is not responsible for the advice, products and services provided by Altus Accounting. Julie Azzi is a credit representative (CR No. 366834) of BLSSA Pty Ltd ABN 69 117 651 760 (Australian Credit Licence 391237).
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