Under each lead, you can enter an expected contract signing date and the expected construction start date. This is done by navigating to Sales > select relevant Lead > Details.
The expected contract signing date does not affect the cashflow forecast but is used to track when you expect the client to sign a contract and turn the lead into a job.
The expected construction start date indicates when you expect to start construction work for this lead. This date will impact the cashflow forecast shown when you toggle on the option to Include weighted pipeline sales. Factors considered when forecasting the cashflow include: the budget amount, project type, build duration, target company markup, conversion rate of the pipeline status, and the expected start date.
You can edit the build duration settings by navigating to Settings > Data Setup > Project Types and selecting the ✏️ icon. This will decide how the cash inflows and outflows will be spread out month to month.
You can edit the Target markup by navigating to Settings > Cashflow Setup, and enter the percentage in Target Markup. This rate will be used to calculate the profit based on the budget amount.
You can also edit the conversion rate for each sales pipeline by navigating to Settings > Sales Pipeline > and selecting the ✏️ icon. This will calculate the profit to be included in the cashflow forecast for each lead status.
An example is set out below:
Project Budget: $350,000 (includes tax and margin)
Project Type: Single-storey (6-month standard build duration)
Target Markup: 33% (Company-wide default)
Expected Start date: 25th September 2024
Conversion Rate: 90% for lead status, close to signing
A 33% markup (25% builders margin) based on a budget of $350,000 is broken down further below:
Cost: $262,570 including GST
Profit: $87,430 including GST (markup 33% / margin 25%)
Total Revenue Excl. Tax (10%): $318,182
Total Revenue Inc. Tax (10%): $350,000
In the Company Cashflow, with the conversion rate on the lead status predicted as 90%, there will be a total profit of $78,687 spread evenly over the next 6 months from the construction start date. This would mean a $13,115 increase in forecast cash position, each month from September through February.