4 Hacks to Boost Your Studio’s Cash Flow

by Milca Jago on Jul 27, 2017 9:00:00 AM

4 Hacks to Boost Your Studio’s Cashflow


Let’s talk about the one variable that runs deep through the veins of the studio. It’s what experts call the “lifeblood” of your entire firm, what keeps the business up and running –you got it- money! Cash-flow management is one of the cornerstones of AE firms; for this reason, it’s time to take a moment and analyze how you’re handling yours! No matter where you’re standing at this very point, the following tips will hopefully help improve your cash flow management strategy:

The PMSJ (Project Management Institute) explains there are two elements that you deal with on a daily basis, and therefore you should keep an eye on: Account Receivable (AR) and Work In Progress (WIP). WIP represents the exact amount of work in dollars that has already been completed, yet not invoiced to the client. Whereas once a job has been both completed and invoiced, it becomes an AR. When you put both together, the total amount is equal to what is known as your “project investment”. Your job is to keep these two factors as low as possible.

So, where do you start?

A few strategies you can start implementing right now are:

  • Negotiate billing more often than every 30 days with your client.
  • Request a retainer before starting a project.
  • Charge a lump-sum the first days of the month.
  • Keep track of time correctly

These are just a few of several hacks that will optimize your cash flow management. At the end of the day, the best response to detect and timely solve any hick-ups in your budget is to use a system that allows you to see all your variables interacting in real time.


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Topics: Leadership, Project Management, architecture, engineer, design, PM