How to Optimize Project Financials

My favorite project management tool is the anticipated cost report. After working on dozens of projects, I've seen how teams that diligently manage via an anticipated cost report simply perform better. To start: Every development project needs an anticipated cost report. Period. This isn't optional - it's the industry standard for tracking original contract amounts, change orders, current commitments, and what's actually been billed and paid to date. Think of it as your project's financial heartbeat. Without regular monitoring, you have no idea if you're on track for schedule or budget, and those are ultimately the two project metrics that you have the most control over. Here's what most people miss: your report must include ALL project costs, not just the GC contract. Those soft costs like permits, design fees, legal, and contingencies need equal tracking. They can be the places where the most unexpected surprises hide. I recommend updating the ACR after each pay application is issued. This creates a natural rhythm of financial oversight that keeps you ahead of problems rather than scrambling to react to them. The real value comes in identifying disconnects early. If materials haven't been purchased within lead time windows (which you'll see in the "billed" and "paid" columns), those scopes are already at risk. Flagging them sooner rather than later is the point. Same goes for spending that's outpacing schedule progress. When you see that trend emerging, you still have time to course-correct before the budget is totally blown. We always set clear variance thresholds that trigger action. On my projects, any line item exceeding 5% of budget requires immediate investigation. No exceptions. A well-managed ACR is also the foundation for good cash flow projections. This lets us model various scenarios and take preventive action months before problems manifest on site. Final thought: Make sure the ACR is easy to update, this will ensure it is useful. I've seen too many teams create overly complex tracking systems, to the point where they are useless. Remember: You cannot manage what you do not measure. Everything begins with a comprehensive, consistently updated cost report that records the project and provides data for better decision-making

Maintenance and Reliability Best Practice (If you really want to improve) 1) Set Clear Goals and Expectations (not just talk) 2) Simplify Processes 3) Optimize Strategies 4) Minimize Downtime 5) Use Technology Expanded below 1) Set Clear Goals and Expectations (PDCA - Not Just Talk) Set goals to boost EBITDA and Capacity (e.g., cost reduction, asset uptime). Track (MTBF, MTTR, OEE) to measure financial and capacity impacts. Engage (leadership, operators, maintainers, customers) to align on priorities. Apply PDCA cycles to refine strategies for profitability and output. 2) Simplify Processes Use RCM to prioritize critical assets and eliminate non-value-adding tasks. Apply FMEA to reduce design-related risks impacting EBITDA. Streamline workflows with Value Stream Mapping to cut waste. Standardize and Simplify components to lower costs and support capacity. 3) Optimize Strategies Implement operator-based maintenance to align with maintenance goals and enhanced capacity. Adjust maintenance schedules using data to maximize uptime and minimize costs. Optimize spare parts inventory to balance availability and financial efficiency. Train operators and technicians to support defect elimination and reliability. 4) Minimize Downtime Use RCA to identify and eliminate defects threatening capacity and profitability. Manage work orders with CMMS to ensure high asset availability. Pre-kit materials to speed up maintenance tasks. Create clear SOPs for consistent operator and maintenance execution. 5) Use Technology Monitor assets with condition-based systems to maintain high capacity. Predict and prevent failures using analytics to protect EBITDA. Automate CMMS workflows for efficient defect tracking and resolution. Explore digital twins or robotics to optimize inspections and operations. ReliabilityX

How did Madden Elevator financially manage a 1.3M Project as a small company? When large projects are won like in the case of Madden Elevator landing 1.3 million dollar job as a small company, it’s imperative to proactively project plan. This is not only parts, material, and labor but also project cash flow. Madden made some special project cash flow tools that assisted in managing money and rolled up into the 13-week cash flow model.    Elevators are complex systems, and managing costs well can be the difference between a project that succeeds and one that fails. Balancing your budget and managing cash flow ensures resources are in the right place at the right time, keeping your project on schedule. Making monthly WIP adjustments is critical to fully understanding project costs, so we recommend weekly WIP reviews. Planning for the unexpected is equally important; incorporating contingency funds into your budget ensures that unforeseen challenges don’t derail the project. Flexibility is another key component, as financial plans must be adaptable to changes in scope, unexpected delays, or new opportunities that might arise. Regular monitoring and setting financial milestones are best practices that help keep the project on track, allowing for timely adjustments as needed.    I’ll leave you with 3 critical things to ensure project success:  • The 5 P’s: Proper Planning Prevents Poor Performance!  • CASH is King, do Project Cash Flow Planning rolled into a 13-week cash forecast!  • Weekly WIP reviews will keep you on top of the project enabling you to can make early adjustments for project management success.    Read the full article: https://lnkd.in/e6yPXzXX   Be safe out there! #EmpoweringEntrepreneurs #ElevatorIndustry #ProjectManagement #FinancialPlanning