Summary
As companies in the construction industry become more cognizant of cash-flow position and ways to improve that position, maintaining an overbilled status on projects is becoming more of a priority. The reason is this: The quicker a company can convert a contract amount into a billed account receivable, the quicker that contract amount converts into cash. The CPA can play a vital role in a company's goal to improve cash flow. The CPA can help educate members of a company's management team by advising them to structure their projects' Schedule of Values (AIA billing document - Form G703) to "front load" overhead and profit into the first several stages of the project. Make "setup and mobilization" the first item on the Schedule of Values and allocate as much value to this item as possible, within reason. The CPA should regularly attend construction progress meetings on major projects.
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Extract
Industry
As companies in the construction industry become more cognizant of cash-flow position and ways to improve that position, maintaining an overtoiled status on projects is becoming more of a priority. The reason is thi...
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