Work in progress is when you have been given an order for a job and you are in the process of working through it towards completion. Depending on the size of the job, this period can be quite lengthy and so you will need to manage the process well. After all, the sooner you complete the job, the earlier you can invoice and therefore get paid.
Here are some helpful hints to consider when managing work in progress:
Record all the details of the job/order. You have a licensing requirement in building to provide the customer a written quote that stipulates all relevant details of the job. My recommendation would be to have a quote for every job you do, irrespective of size, to eliminate any potential confusion or miscommunication. Ensure you detail the specifics of the job, including:
Start and finish dates (where possible)
Any payments received
Any progress payments to be made and timing of these payments
Any additional requirements to be able to complete the job (for example, reliance on contractors or the client)
Manage potential delays caused by the client by ensuring they are very clear on expectations of the job process and timing of payment or payments.
Manage potential delays caused by contractors by ensuring they have booked your job in for the designated days/weeks and that they know whose responsibility it is to provide relevant materials and equipment.
Manage potential delays caused by the work area in terms of location, access and power availability by planning for all those issues beforehand.
Manage potential delays caused by external factors such as monitoring for bad weather or being aware of other public works in the area.
Invoice immediately at all agreed points in time.
Order materials and supplies when you are ready to commence, allowing for any lead times.
Identify any potential bottlenecks, such as not having the right tradespeople on site at the right time, and look for alternatives, such as scheduling the job well and having others you can call on when needed.
Ensure that you have the right levels of materials and supplies to complete the job, as delays in receiving goods will delay completion and therefore payment.
Schedule all relevant labour to ensure they are ready and available when required, as other commitments could delay completion and therefore payment.
If you would like to discuss these or other strategies, do not hesitate to get in touch.
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Tony has 33 years’ experience as an accountant, and 13 years’ experience as a CPA. His first 18 years’ experience involved financial, management and operational accounting roles at a senior management level, in the security, transport, and forensic accounting industries
https://adpartners.com.au/wp-content/uploads/2017/08/logo.png00Tony Dimitriadishttps://adpartners.com.au/wp-content/uploads/2017/08/logo.pngTony Dimitriadis2018-04-10 22:31:232019-05-12 05:35:28How well do you manage your work in progress?
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