Saturday, February 13, 2016

Cash Flow Management for Modular Home Builders

Modcoach note: A few weeks ago I was approached by Don Mattia, a modular home builder who wanted to share his Cash Flow system with other modular builders. After talking with him through emails and phone calls I decided to introduce him to readers of this blog. 

Hi, my name is Don Mattia and I would like to introduce myself to other modular home builders. In 1975 when I started in residential construction, an IBM self correcting typewriter was considered cutting edge technology. With affordable computers still several years away; accounting, pricing, and cost control were done manually. Accurately projecting operational cash flow was a continuous problem.     

When affordable computers became available in the early eighties, accounting and building programs were expensive and difficult to operate. Like most other small builders, I combined the computer with manual administrative procedures to run the company. Accurately projecting operational cash flow still remained a problem.
In 2010, with new construction coming to a standstill and future income uncertain; I needed a better way to project and separate operational cash flow from construction funds.      
I found that as a modular home builder could use an Excel spreadsheet and these steps to identify and project operational cash flow.
* Establish a draw schedule consisting of a deposit and 6 draws
* List the job functions that are required to complete a project
* Assign estimated costs to the job functions
* Update the estimated costs after obtaining bids and setting allowances
* Add and mark up the job costs to the contract price that meets your O&P objective
* Assign a deposit or draw number to all job functions
* Post the job functions projected cost to the assigned draw number
* Total the deposit and draw costs (This identifies the required Construction funds)
* Distribute and add the remaining funds to the draws (This establishes your draw schedule)
* Subtract the costs from the draw schedule (The balance will be your Operating funds)
* Schedule the deposit and draw dates   
* Summarize and post the operating funds by month from all jobs (This is your operating cash flow projection)
In 2015, I teamed up with to incorporate this procedure into a comprehensive system that worked outside of my accounting system and covered all areas of cost control and cash flow management.
To see a demonstration of the program, use and open the instruction video

If you have any questions or comments, I can be reached at

It is important to note that Modcoach does not endorse this or any other bookkeeping system and makes no statements or warranties as to its functionality or usefulness in your business.

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