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KPIs

Overview

We have 2 main goals for the management dashboards project.

1) Project accounting: calculate margins, costs, timely invoicing...

2) Liquidity overview: map cash flows for stock, illiquid stock, unfinished work

One of the main challenges is to allocate prapayments to the projects. We don't have clear project phases and as with all long construction projects, it can be hard to allocate revenues. Also some overhead costs are now not yet registered on the project. For example: Project Manager time, certain stock, study time...

KPQ

  1. How can we know and monitor the profitability of our projects on a daily basis by:
  • project
  • client
  • company
  • project manager
  • time period
  1. How can we oversee our cash flows on a daily basis so that we can communicate with:
  • suppliers
  • project managers
  • liquidity providers

KPIs

Entities

Project profitability

Budget

\(R^{budget} = R^{ordered} + R^{extras}\)

Expenses (Project Cost)

\(X_{tot} = X_{mat} + X_{h} + X_{prod} + X_{sub}\)

Completion

\(Completion \% = \frac{R^{invoiced}}{R^{budget}}\)

Earnings (Profit)

\(E\$ = R^{invoiced} - X_{tot}\)

Earnings margin:

\(E\% = \frac{R^{invoiced} - X}{R^{invoiced}}\)

With:

  • R = Revenues
  • extras = meerwerken
  • \(X\) = Project Cost
  • \(X^{mat}\) = material cost (gross budgetted, excluding margin)
  • \(X^{h}\) = hours (uren)
  • \(X^{prod}\) = products
  • \(X^{sub}\) = sub-contractors (onderaanneming)
  • E = profit (earnings)

Project Cost Status

The cost status for tot and each source (mat, h, prod, sub) depends on the relationship between actuals and budget:

  • red: \(X^{actual}_{i} > X^{budget}_{i}\)
  • amber: \(X^{actual}_{i} = X^{budget}_{i}\) +/- 2%
  • green: \(X^{actual}_{i} < 0.98 * X^{budget}_{i}\)

Project Profit Status

  • \(E\%\) < 5%: Red
  • 5% < \(E\%\) < 15%: Amber
  • \(E\%\) > 15%: Green

Cash planning

\(LIQ^{expected} = LIQ^{current} + CF^{expected}\)

\(CF^{expected} = AR - AP - L - I - LR - LEAS - VAT\)

With:

  • LIQ = Liquidity
  • CF = Cash Flow
  • AR = Accounts Receivables / Debitor invoices (cash in)
  • AP = Accounts Payables / Creditor Invoices (cash out)
  • L = Salaries (Labour)
  • I = Interest payments
  • LR = Loan Repayments
  • LEAS = Leasing
  • VAT = TAX (21%)

QUESTION: Should we include credit line / current account into LIQ?