Data Disarray: Financial Visibility Hurdles

Before adopting ProNovos, OTL faced significant challenges in collecting and managing financial information. Project managers each had their own methods for updating forecasts, relying heavily on Excel spreadsheets, which led to scattered data that was often difficult to interpret. The accounting software lacked adequate functionality for updating forecasts, making it nearly impossible to obtain timely and comprehensive insights into the performance of active projects. This disjointed approach hindered effective decision-making and created inefficiencies in managing project finances.

Cash and Culture are King

Cash flow is paramount for any construction business—especially for a specialty contractor like OTL. Zimmerman emphasizes that submitting accurate billings and collecting payments promptly is essential to maintaining a healthy business. Having timely insights into billing activities and profit margins is critical, and ProNovos has helped OTL achieve this, providing visibility both in the field and the office.

Zimmerman stresses that collecting cash starts in the field, highlighting the importance of open communication between project managers and leadership. Project managers may hesitate to disclose problems on a job, often hoping issues will resolve themselves before the project’s end. This reluctance can delay the resolution of challenges, making it crucial for teams to foster a culture of transparency and openness.

Zimmerman believes in the importance of alignment, stating, “We can’t help solve a problem if we don’t know it exists.” Effective communication also requires using the same language. For instance, many project managers might equate earned revenue with billings, seeing billings as a positive metric. While Zimmerman supports overbilling when correctly managed, he emphasizes the need for project managers to understand the distinction between cash flow (which impacts the balance sheet) and a project’s financial performance (which affects the income statement). This clarity is essential for effective decision-making and financial management at OTL.

Strengthening the Business for Tough Times

Contractors often face cash flow challenges during economic downturns and even the recovery phase. While good contractors strive to maintain overbillings on their projects to keep cash flowing, the reality is that as the economy slows, collections tend to lag. Payments can become delayed, especially as projects near completion, putting added pressure on cash reserves. Zimmerman notes that ProNovos plays a vital role here, enabling OTL to closely monitor their cash position and ensure they maintain sufficient reserves or have access to a line of credit to weather these periods.

Zimmerman also emphasizes the importance of being proactive in the recovery phase. He advises that waiting for cash flow to improve naturally can leave contractors playing catch-up. Instead, investing during the growth phase—before cash flow fully rebounds—can position a business for future success. Strategic investments in marketing and business development are crucial to being ready for accelerated growth when the market picks up again.

Moreover, training project managers in financial principles can make a significant difference. This knowledge helps ensure alignment between project teams and financial goals, fostering a unified approach to navigating both the challenges and opportunities that come with economic shifts.

Critical aspects such as financials, change orders, billings, collections, schedules, and emerging issues are discussed during each review. Zimmerman emphasizes, “ProNovos consolidates all this information in one central location, allowing the team to navigate through job reviews seamlessly, add notes, and input necessary details.” This streamlined approach significantly speeds up the review process and enhances overall efficiency.

Given that Wick’s team reviews every job monthly, managing 60 to 70 projects in a more organized and efficient manner is crucial. Without ProNovos, the review process would be much more cumbersome for everyone involved, hindering the team’s ability to operate effectively in a fast-paced environment.