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A/E Design Firms Increase Cash Flow – Reduce Collection Delays
A/E Design Firms Increase Cash Flow – Reduce Collection Delays
Leaders of architecture, engineering, and environmental consulting design firms are implementing strategies to speed up collections during difficult economic times.
Fayetteville,
Arkansas,
United States of America
(prbd.net)
06/10/2010
"“By shortening our billing cycle by 15 days, we were able to increase our cash flow by 50% in 2009,” Linda Leong, chief financial officer with Finley Engineering Company"
Natick, MA—Leaders of architecture, engineering, and environmental consulting design firms are implementing strategies to speed up collections during difficult economic times.
In an article published in the Sept. 27 issue of The Zweig Letter, executives said they have been able to reduce average collection periods on accounts receivable, resulting in increased cash flow. That trend matches the findings of ZweigWhite’s 2010 Financial Performance Survey.
According to the survey, average collection periods have dropped from 78 days in the 2009 edition of the survey to 74 days in the current edition. That’s down from a 10-year high of 82 days in 2008.
“By shortening our billing cycle by 15 days, we were able to increase our cash flow by 50% in 2009,” Linda Leong, chief financial officer with Finley Engineering Company, Inc. in Lamar, Missouri, told The Zweig Letter. “The key to success is to focus on the entire business process: credit approval, billing processes, and collection efforts and by doing so you will maximize cash flow and minimize back-end collection efforts.”
Leong added that firms can substantially improve cash flow shortening the gap between the close of the accounting cycle and the day invoices are mailed.
Others are taking more practical approaches to collection, including Lisa Blanton, CFO at Watry Design, Inc. in Redwood City, California.
“We implemented sending our invoices by PDF on an attached e-mail with a confirming reply back,” Blanton said. The strategy reduced collections by 10 days on average.
About ZweigWhite: ZweigWhite is the nation’s leader in enhancing business performance for architecture, engineering, and environmental consulting firms. The ZweigWhite team consists of experts in strategy, mergers and acquisitions, business valuation, ownership transition, human resources management, finance, marketing, market research, project management and project delivery methods who collectively produce a comprehensive suite of products and services, including advisory, consulting, newsletters, industry reports, executive training, business conferences, and more covering virtually every aspect of firm management. The firm is headquartered in Fayetteville, Arkansas, with additional offices in, Chicago, IL, Durham, NC, and Natick, MA. The ownership of ZweigWhite are investors Eli Global and BIA Digital Partners, with management including Mark Zweig and Ed Friedrichs. For more information contact Sonya Stout at 479.582.5700, or sstout@zweigwhite.com.
About
ZweigWhite is the nation’s leader in enhancing business performance for architecture, engineering, and environmental consulting firms. The ZweigWhite team consists of experts in strategic business planning, business valuation, ownership transition, human resources management, finance and administration, mergers and acquisitions, market research, marketing, project management and project delivery methods who collectively produce a comprehensive suite of products and services, including newsletter
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