Keys to Success
Step 1 in implementation of an ERP solution is about ensuring a good flow from order to cash, making sure that all hours are entered and you invoice as much as possible.
The following table outlines some of the key initiatives needed to improve cash flow.
| Initiative | Description |
|---|---|
| 1. Capture time efficiently | Enter billable time in close connection with execution (as soon as possible) to prevent loss of billable time. (People tend to quickly forget, or understate, hours spent on projects.) |
| 2. Ensure invoicing as soon as possible by those in charge | Invoice clients as soon as possible after completion to improve cash flow. Also, maximize the amount invoiced. Thus, invoicing should be conducted by the people who control the projects: PMs. |
| 3. Manage small work orders efficiently | PSOs often consist of small jobs, delimited in time/scope. You should manage these jobs differently compared to large-scale projects. You can often invoice them upon order to improve cash flow. |
| 4. Tight control on collection | Management and employees who are responsible for invoicing should keep track of WIP and A/R from an aging perspective to monitor that all billable time is billed and that all invoices are paid on time. |
The following figure illustrates a typical process from the point when the order is signed until the invoice is sent and mo
ney is collected. Some steps shows below are optional.
If you followed the preceding steps, “create project” and “set budget” repeat what we have already described. The following description begins with time entry.