Grace PM Academy · Module 3

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A ~15‑minute read that ties the two videos together. A project manager keeps the Quick Reference open during the work, and goes deeper in the Field Guide.

The videos followed the money from a full backlog to cash in the bank. This lesson lays out the pipeline, the three behaviors that move money through it, and the Grace billing rhythm that keeps it flowing. It remains Outcome #4, followed one step past profit, to the cash that actually pays for it.

Where this fitsBehavior Protect IntegrityOutcome 4 · Sustained Financial HealthLifecycle Execution → closeout

Recall · before you begin

From Module 2, you learned to protect the margin. So why is a protected margin not enough to keep the firm running?

Because profit is not cash. Margin you have earned can sit trapped as unbilled or uncollected work. Earned is not the same as paid.

The four patterns in cash

Oakhaven · the same month, two PMs

Money is abstract until it costs someone real money, so consider one Oakhaven month, the same project and the same fee, run two ways by two different project managers.

The moment	The People Pleaser	The Accountable Owner
$150k of finished work, ready to bill	Logs it to bill “next cycle”, and the firm finances $150k for two months	Bills it on the rhythm, and the $150k starts moving toward cash
A $40k change the client requests	Says “It is a big fee, this is small” and absorbs it, so the $40k never enters the pipe	Names it kindly, prices it, logs it, and the client gets a clean choice
What the $40k really cost	A postponed hire, delayed bonuses, software the team needed, all capacity the firm cannot use	Margin intact, and the client respected the honesty

The core idea

Same project, same team, same fee. The only difference between a calm firm and a stressed one was a few sentences someone was willing to say.

Those two are only the sharpest contrast. This module presents four patterns in how project managers handle the money: three capable people with one blind spot each, and the one to build toward.

The Competent Coordinator

Tendency: Treats billing and collections as accounting’s job.
Blind spot: Finished work ages as WIP while the log stays tidy.
Preferred behavior: Own the money to cash: bill on the rhythm, watch AR.

The Obsessed Designer

Tendency: Focused on the work itself, the next deliverable.
Blind spot: Lets invoicing slip while perfecting the drawings.
Preferred behavior: Close the billing loop before rolling onto the next thing.

The People Pleaser

Tendency: Avoids the fee conversation.
Blind spot: Absorbs the change, saying ‘it is a big fee, this is small’, and $40k is given away quietly.
Preferred behavior: Name it kindly, price it, give the client a clean choice.

The Accountable Owner

Stance: Turns earned work into cash, on every project.
Watch-out: A full backlog feels like success. It pays no one until it becomes cash.
The standard: Prices on the spot, bills on the rhythm, collects to the last invoice.

Why can a profitable firm run short of cash?

A firm can be busy, winning work, and profitable on paper, and still come within days of missing payroll. Profit is what the books say the firm has earned, including work finished but not yet paid for. Cash is what sits in the account today.

Core idea

Profit is earned. Cash is received. Profit is an opinion. Cash is a fact. A project manager’s responsibility does not end when the drawings go out. It ends when the cash comes in.

?Profitable, or paid?

You finish a $100k phase in December, and the client pays in March. Is the money in the bank?

No. It is real profit in December. Through January and February you are paying the team out of cash you do not have yet. Profitable on paper, cash-poor until spring.

Where does a dollar sit before it can pay anyone?

Every dollar a client owes travels a pipeline before it can pay anyone, and the two stages in the middle, WIP and receivables, are real money the firm has earned and cannot yet spend. The firm keeps paying the team in cash the whole time.

Stage	What it is	Can it pay a salary?
Backlog	Work won but not yet done, a promise.	No
Work in Progress (WIP)	Work done but not yet invoiced.	No
Receivables (AR)	Work billed but not yet paid.	No
Cash	Money actually in the bank.	Yes

The pipe carries every dollar from backlog (a promise) to cash (the only chamber that can pay a salary). In between, WIP and receivables are real money the firm has already earned, and it stays frozen until someone bills and collects it, and payroll drains cash on its own schedule. That gap is exactly how a profitable firm still misses payroll.

Consider one transition, the point where finished work becomes a sent invoice, since the pipe narrows here and this narrow stretch is almost entirely a project manager’s to control.

The pipe pinches where WIP becomes receivables, the moment earned work becomes a billed invoice. That throat is the Project Manager Speed Zone: reviewing pre-bills, finalizing, and getting invoices out. It is small, and it belongs almost entirely to the project manager. Moving fast through it keeps cash flowing. Letting it sit turns this narrow stretch into the bottleneck that starves the whole firm of cash.

ToolMove the money · backlog to cash

From the video: ~$150k of finished work sat as WIP. Only cash pays a salary. Move the money through the pipe and watch how much is actually spendable at each step.

Backlog

$150k

›

WIP (done, unbilled)

›

Receivables (billed)

›

Cash (spendable)

Cash available to spend today: $0. The work is earned, and none of it pays anyone yet.

ToolFee-to-Cash building blocks

Watch each month’s work move through a six-month project. Every row is a month’s work ($50k): it sits as backlog until it is done, spends that month as WIP, gets billed on the 7th of the next month (AR), then collects over the following months. Slide the collection period to see what collecting faster does.

Collection period · months from invoice to cash 2

Backlog · won, not yet done WIP · earned, unbilled AR · billed, unpaid Cash · spendable

Who is financing whom · the float

Add up what sits in that pipe at any moment and it has a name: the float, money Grace has earned, paid salaries against, and not yet received. On Oakhaven alone, a typical month earns ~$115k of Grace’s $1.4M fee, and even a client who pays on time pays weeks after the work, so the firm permanently carries roughly two to three months of the project in cash it has not seen. Multiply that across every active project and the firm is running an interest-free bank for its clients, sometimes on borrowed money that is not interest-free at all.

Every unbilled day is a loan

The firm never signed for this loan, and the project manager sets its terms: billing speed and follow-up are the interest rate. The float consumes the same thin slice Module 2 taught project managers to protect. Carrying cost, write-offs on aged invoices, and hours spent chasing old money all come out of the 15 to 20¢.

What three moves turn earned work into cash?

Money does not move on its own, and it gets stuck in three places, each of them pointing to a behavior.

Bill it→finished work that is never invoiced (ages as WIP)

Price it→scope changes absorbed for free (never enters the pipe)

Collect it→invoices sent but never followed up (ages as AR)

The three behaviors are derived. Each is the one move that closes a specific leak in the pipe: unbilled WIP → Bill it, an absorbed change → Price it, an aging receivable → Collect it. Do all three and earned work turns into cash.

From Module 1

Bill it, price it, collect it is Protect Integrity, aimed straight at the money. Pricing a change protects the contract. Billing and collecting protect the fee already earned.

The hardest move: the fee conversation

Three of these moves are mostly mechanical, and one demands a conversation. Price it means telling a client what something costs, and that is where most project managers freeze, since the fear is rarely the lost $40k but the thought of disappointing someone. A project manager reframes the conversation before entering the room.

The fee conversation is a service. The client is owed a clear choice rather than a quiet surprise on the invoice.

An opening line for that conversation:

“That is a great idea, and it is a change from what we scoped. Let me price it so you can decide whether it is worth it.”

Kind and clear, it hands the client a decision instead of quietly absorbing the cost, and that is the whole distance between the People Pleaser and the Accountable Owner.

Rehearse it · on a live project

?Draft your first two lines.

Pick a real change or an unpriced ask on a project you run right now. Write the exact first two sentences you would say to the client: name the change, then offer the priced choice. Bring it to the live session.

What does the Grace rhythm require?

Practice	Standard
Pre-bill review	By the 25th
Invoice out	By the 7th
Scope change	Additional services: priced and logged in the change log
Closeout	Chase the final unpaid invoices, and do not let the last 10% drift for months
System of record	BST

The rhythm has a scoreboard · BST11 column ⑦

Module 2 taught scorecard columns ① to ⑥. This module lives in column ⑦, the day counts. Unbilled Days is how long earned work sits before an invoice exists, the Speed Zone with a number on it, and almost entirely within a project manager’s control. Receivable Days is invoice to cash. Added together, they give days to cash: the length of the pipe, and the single best measure of how well this module is being practiced on a project. Those same day counts drive the My Portfolio Alerts tab, the Aged Unbilled > 30 Days and Receivables Aging lists a principal opens first. Both appear live in the BST11 Dashboard Explainer →

The money that belongs to others

Half of Oakhaven’s $2.8M design fee belongs to consultants, and where agreements are pay-when-paid, they see their money when the client’s cash lands. A project manager’s billing rhythm is the structural engineer’s payroll. Where the contract holds retainage, the “last 10%” is waiting for a release the project manager triggers at closeout. Payment terms, retainage, pay-when-paid: all decided at contract, before the first invoice. That is the ground Module 4 covers.

Put it to work

Your one tool this week

Open the Quick Reference and run Move the money · backlog to cash on a live project: find work that is earned but still unbilled or uncollected, and make the one call or invoice that moves it. That single habit is the whole module put into practice.

On your most important project

What have you earned that you have not billed?
What have you done that you have not priced?
What have you billed that you have not collected? Then go move all three.
Then put a number on the pipe: unbilled days + receivable days = your days to cash. Pull both from BST, write it down, and re-measure it in a month.

Challenge · from memory

?Challenge · from memory.

Name the four pipeline stages in order, and the three moves that turn work into cash.

Stages: Backlog → WIP → Receivables → Cash. Moves: Bill it · Price it · Collect it. These are Protect Integrity, aimed at the money.

Then do

Be the Accountable Owner from that opening Oakhaven month, the one whose few sentences kept the firm calm. “Backlog is a promise. Cash is reality. You are the person who turns one into the other.” Watch the module videos →