Grace PM Academy · Module 3 · Quick Reference

Module Home › Quick Reference

Job aid. Keep this open while working. Contains the pipeline tool, the float & flow metrics, and quick drills. Watch the videos and read the Overview first.

Project Finance 2 · What to Know

Profit is earned. Cash is received. Profit is an opinion, cash is a fact. Work becomes cash only when someone bills it, prices it, and collects it. That someone is the project manager.

On a live project

✓ What to do

Bill it: pre-bill by the 25th, invoice by the 7th. Bill everything earned.
Price it: every scope change is additional services. Price it and log it.
Collect it: watch receivables. Chase the final invoices at closeout.
Know the earned-but-not-billed number on the busiest project.

⚠ What to watch for

Finished work aging as WIP, unbilled.
Invoices aging as AR, un-chased.
A full backlog mistaken for cash.
The last 10% drifting for months after closeout.

✕ What to avoid

Treating billing & collections as accounting’s job.
Absorbing a scope change to avoid the conversation.
Letting finished work sit unbilled.
Confusing profit with cash.

Grace process anchors

The pipeline

Backlog → WIP → Receivables → Cashonly cash pays a salary

The rhythm · the Speed Zone

Pre-bill 25th · Invoice 7ththe WIP→AR step the project manager controls. Do not let earned work sit

Changes & record

Additional services via change log · BSTprice on the spot, in writing

The fee conversation

“That is a change from what we scoped. Let me price it so you can decide.”clarity, not confrontation

Archetype quick-tells

Competent CoordinatorBilling is ‘accounting’s job’ → own the money to cash. Bill on the rhythm.

Obsessed DesignerInvoicing slips for the next deliverable → close the billing loop first.

People PleaserAbsorbs the $40k change → name it kindly, price it, give a clean choice.

Accountable OwnerTurns work into cash → prices on the spot, bills monthly, collects to the last invoice.

The fee-to-cash pipeline

Backlog	Won, not done. A promise that cannot pay anyone.
WIP	Done, not invoiced. Bill it.
Receivables (AR)	Billed, not paid. Collect it.
Cash	In the bank. The only stage that pays a salary.

The float & the flow metrics

Put a number on the pipe

The float	Earned, paid-for, not yet received. Oakhaven alone: ~2 to 3 months of work (~$230k to $350k) carried by Grace at all times, an interest-free loan whose terms the project manager sets.
Unbilled Days	Earned work → invoice. The Speed Zone metric, controlled by the project manager. On the rhythm ≈ single digits to 15. Drifting = 45+.
Receivable Days (DSO)	Invoice → cash = AR ÷ average daily billings. Industry ≈ 70 days (illustrative, confirm in BST). A well-run project beats it.
Days to cash	Unbilled + receivable. The length of the pipe. Know it. Re-measure monthly.
Aging buckets	0 to 30 confirm receipt · 31 to 60 find the snag · 61 to 90 call, PIC aware · 90+ leadership & contract remedies.

Consultants & retainage

Pay-when-paid	Consultants carry $1.4M of Oakhaven’s $2.8M. Where contracts say pay-when-paid, the Grace billing rhythm is their payroll. When cash is slow, tell them. Silence costs the partnership.
Consultant pre-bills	In early enough to make the 25th pre-bill review (confirm per agreement). Review them like Grace labor. A disputed consultant line delays the entire invoice.
Retainage	Some contracts hold 5 to 10% until completion. Know what releases it. Put the release on the closeout checklist. Retainage moves only when someone asks for it.

Try it · move the money through the pipe

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 read how much is spendable at each step.

Backlog

$150k

›

WIP (done, unbilled)

›

Receivables (billed)

›

Cash (spendable)

Cash spendable today: $0. The work is earned. None of it pays anyone yet.

ToolFee-to-Cash building blocks

Watch one month of work move through a six-month project. Each row is one month’s work ($50k). Follow it as it turns from earned work (WIP) to a sent invoice (AR) to cash. Slide the lag to see what collecting faster does.

Months from finished work to cash 2

WIP: earned, unbilled AR: billed, unpaid Cash: spendable

Quick drills · spot it

A full backlog and a great year on paper. Can the firm make payroll?

Not necessarily. Backlog and profit are not cash. If work sits unbilled (WIP) or uncollected (AR), the money cannot pay anyone.

Mid-project the client requests clearly extra work. The fee is large. Absorb it to keep them happy?

Price it. Unpriced work never enters the pipe and can never become cash. Name it, price it as additional services, log it.

A project shows 12 unbilled days and 78 receivable days. Where does the effort go?

Collections. The Speed Zone is clean. Invoices go out on the rhythm. 78 receivable days means the pipe is clogged downstream: confirm approval on the newest invoice, and call rather than email anything past 60.

The structural engineer calls: “We billed you 60 days ago.” The client has not paid Grace either. Best move?

Status, then action. Pay-when-paid makes Grace collections their payroll. “Client’s March invoice is at day 55. I am calling today. Yours releases when it lands” keeps a partner. Silence leads a consultant to staff the next deadline accordingly.