A contractor friend once told me, "If your inflow is less than your outflow, your upkeep will be your downfall." And unfortunately, the only way to follow this simple maxim has been to monitor income and expenses by laboriously combining scheduling applications with accounting programs and large amounts of daily data entry. For the small contractor with just a few minutes a day to spare, the solution has been to 'keep it in your head."
That's why the motto Add-Vantage Software's Iain Crerar and Russell Santoro expounds is: "If you need more than one finger to do it, it's too difficult." And that's also the concept behind The Scheduler’s Add-Vantage spreadsheet-based Gantt charting program. By drawing task bars and cash flows across a monthly, weekly, or daily calendar, a contractor can graphically represent his project in conjunction with his cash flow.
Visualize the schedule
To schedule a task, you drag across a range of cells representing the task length in days, weeks, or months. Next, you name the task by clicking on one of the 20 buttons ranging from excavation to cleanup, or give it a custom name using the User button. In both cases, clicking on a button labels the highlighted cells and fills them with a unique color and hatch pattern to represent the task. You build the schedule by continuing to add tasks along the row. Where tasks like plumbing and electrical run simultaneously (in parallel), they can be drawn in a second or third row (Figure 2).
Order and delivery dates for materials are established next. First, you scroll back to the beginning of the project, and by inspecting each of the previously entered tasks, you visually determine and fill in dates when materials for each task need to be ordered. It's very easy and intuitive (I hesitate to use the word, but in this case it's true) to log these events onto the chart directly under each task. The delivery date is entered on a separate Delivery line.
| Figure 2. Small jobs with a few dozen tasks can easily be scheduled, and their cash flow monitored, with The Scheduler's Add-Vantage. The program returns a cash flow Job Balance (bottom) when the user logs material orders, deliveries, payroll, subcontractor payments, and job income in a visual "stack' |
Visualize the cash flow
Once you have completed scheduling the tasks, material orders, and delivery dates, you can work on the Cash Flow portion of the schedule. All cash inflows and outflows, whether for payroll, materials, or subcontractors, are recorded in the cells based on the dates they are paid.
Payroll is first. If you have a $600 payroll every Friday, for example, you would put a .6 in every Friday cell. For a $2,500 lumber delivery, you input 2.5 in a cell directly under the lumber delivery task. There's also a Subcontractor row for recording subcontractor payments. If you want to pay your foundation sub right after he finishes, you enter the amount in a Subcontractor cell directly under the finish of the foundation task. A row for Income rounds out the scheduled cash-flow items.
A Period Balance row tracks your cash flow by day, week, or month, and the last row, called the Project Balance row, keeps a running balance of your cash. Set up this way, it's simple to create "what-if " scenarios and determine just when you can pay subs and suppliers and when you need to get your billing out. It's even possible to build in lag times for slow payments (from clients or to your subs).
This system is brilliant in its simplicity and elegance. In five minutes you will 'see" the logic, and be scheduling your jobs and monitoring your cash flow. With help from the program’s visual prompting, it's very easy to see when you are spending money and, more important, when you need to bill and collect from the owner so that you -are always ahead of the cashflow game. The program is a natural companion to the estimating program by the same company. Both products will suit the small remodeler.
Craig Savage
CONSTRUCTION BUSINESS COMPUTING
FEBRUARY 1997