Operion Journal
The report says 60% complete with a healthy margin, yet the company needs a bank facility to pay site wages. The answer usually sits between contract and cash: bills not submitted, submitted but not approved, approved but unpaid, retentions waiting a year and an advance consumed early.
Stages from contract to cash
| Stage | Document | Watch |
|---|---|---|
| Contract | Value, bill of quantities, payment terms | Advance, retention, approval periods |
| Execution | Work done and costs | Actual vs budget |
| Progress bill | Interim payment application | Submission date and quantity accuracy |
| Approval | Consultant and owner approval | Duration and deductions |
| Invoicing | Tax invoice | Advance recovery and retention |
| Collection | Receipt | Receivable ageing |
| Close-out | Final account and retention release | Guarantees |
Where cash gets stuck
Contract terms are forgotten when not stored as data; costs precede revenue (see linking tasks, purchases and resources to project cost); progress bills are submitted late; approvals cut quantities; approved bills sit unpaid; retentions are forgotten until long after the warranty.
How an ERP connects the cycle
- Contract terms stored on the project.
- Actual cost in real time from purchases, supplier invoices, labour and subcontractor bills.
- Progress bills prepared from recorded quantities.
- Invoices with advance recovery and retention applied automatically.
- Receivable ageing per project and client.
- Retention balances with release dates.
Operion's Smart Buildex manages contracting on ERPNext; see ERPNext for construction and Smart Cash for site cash.
Expected cash flow per project
With terms, expected bills and planned costs in the system, you can forecast when cash comes in and goes out per project, and roll it up for management to plan financing.
KPIs
- Technical progress vs billed percentage.
- Days from period end to bill submission.
- Approval time per client or consultant.
- Approved but uncollected bills and ageing.
- Retention balances and release dates.
- Cumulative net cash per project.
See also progress vs profitability. Request a demo.
Frequently asked questions
Why profitable but no cash?
Profit follows progress while cash waits on billing, approval, payment and retentions.
Can ERPNext prepare progress bills?
Yes, from project quantities with advance and retention deductions, tailored to your format.
How do I track retentions?
Record them per project and client with release dates and a periodic balance report.
Can I forecast cash per project?
Yes, from contract terms, expected bills and planned costs.
