With the recent downturn in the economy and the resulting decline of cash flow, civil engineering firms that are lacking rigorous collection policies and process are seeing an amplification of financial pressure, which is creating enormous pressures for operating capital.

In some cases, the squeeze from economic forces and financially constrained banks continue to force large layoffs, trimming of operating expenses, relocations to smaller space, and a complete transformation of many organizations from their pre-recession stature to completely re-engineered organizations.

In many cases, even firms that were enjoying high profitability throughout the economic downturn might have neglected being rigorous in the collection of outstanding accounts receivable. Firms that have been more responsive to a best practices approach to collection of outstanding accounts receivables have fared better, with less drastic impacts to the culture of their organizations.

Cash flow drives the business, and without a continuing rigor at all levels of the organization, the needs of the firm will not be sustainable in the face of challenging economic and financial times. Of paramount importance is to have a clear and concise strategy to manage this effort effectively, and to ensure that this strategy aligns with the contractual terms of your client agreements.

All positions in the organization – from the accounting staff, the project team, and the senior leadership of the organization – must be working in concert to adhere to the accounts receivable process and procedures.

Following are 12 tips for amping up your collection process and increasing cash flow to your firm:

1) Include your accounting staff in the project kick-off meeting so they meet the client accounting staff and have all the details worked out before you submit your first invoice. If your accounting staff cannot attend the meeting physically, allow for an agenda item that clearly indicates to the client that these items need to be addressed and request the name and contact information of the client's accounting staff. All of the detail of invoice format, timing of receipt for proper turnaround, and questions are sorted out during this review (For more on this tip, see "Professional Practice").

2) Monitor your average collection period (ACP) like other important metrics: ACP = (accounts receivable/gross revenue) x 365. Using the ZweigWhite Financial Survey metrics allows you to see where your organization stands relative to others in your region, for your size and other variables.

3) Accounting staff needs to be the prime contact with the client's accounting staff for questions on invoicing. The project team can intercede and work effectively with accounting in a good cop/bad cop role when needed, allowing them to stay primarily focused on project delivery.

4) On projects that have a predetermined schedule, the project manager never needs to approve a draft – the schedule drives the invoice. Create the opportunity to discuss with your client the benefits of this cash flow schedule. This will show your client that you are sensitive to their cash needs and that it is important to you to create this understanding.

5) Senior leadership should drive review of drafts and get invoices out one week after close of month. Since this process is a monthly planned event, project managers should build this time into the management of the project.

6) Never bill fees and reimbursables together; a client questioning a reimbursable should never hold up fee payment.

7) E-mail and confirm receipt of as many invoices as possible

8) Accounting should provide a follow-up call seven days after an invoice is sent. Have a written policy of review at 30 and 45 days if payment is not received. (Align these dates to the terms of your individual agreements.)

9) Explore alternate payment delivery systems such as direct deposit and overnight courier at your expense (spend $15 to get $100,000 in faster!), or make a personal visit.

10) Employ the project team/principal only if there is a perceived problem. Don't wait, act quickly!

11) Do not be reluctant to call the client. Hold off on submission of documents or deliverables until payment is made.

12) Cash is the life blood of your organization, and accounts receivable "drift" creates what can sometimes be insurmountable and often challenging hurdles.

Ted Maziejka, MBA, LEED AP, senior vice president, IPRIST LLC, has more than 30 years of operational, financial, strategic, and management experience in both small and large architectural, engineering, and planning organizations. He can be contacted at ted@iprist.com.