How Buying a Car Is Like Schedule of Values Billing

mazda and sovRecently my son traded in his truck for a brand new Mazda. Talk about making the buying decision stress-free: This dealership stepped up to the plate on the trade-in value based on the “Kelly Bluebook”, was equally competitive with other dealerships on the purchase price and offered 0% financing for 36 months paid bi-monthly. The paperwork (without any “funny/shady” stuff normally associated with hucksters) was done in less time than it took to do the test drive.

My son is now happily rolling around in the car of his dreams with no regrets.  We later learned that this dealership out-performs others by 4 to 1 in every area. The owner is an ex-software guru turned car dealer and relies on “data” not “emotions” to drive deals and run his business.

So, how is buying a car like Schedule of Values billing?  Well, it was once described to me that “Schedule of Values billing is an art founded in fact.”  And profitable companies deal with facts!

Many companies languish in the billing process because they are:

  • Digging through piles of paper and following paper trails to assemble costs,
  • Constantly reconciling financial systems that are out-of-step with project accounting systems,
  • Debating over the Percent Complete – fact or fiction,
  • Challenged by system-generated Earned Value amounts,
  • Delaying  justifiable fees in favor of customer politics based on the PM’s leniency

The profitable companies don’t struggle with SOV Billing. Why?

  • They use systems that drive suggested billing amounts based on facts.

It is a simple principle that it is easier and quicker to edit than to compose. Instead of starting with a blank worksheet, these systems, such as the Spitfire Project Management System, suggest revenue-based billing amounts by using up-to-the-minute actual costs, change order fees, subcontractor pay requests, retention draw-downs and prior application amounts. Furthermore, since the customer is always right, these systems offer flexible and extensible invoice configuration tools to ensure the SOV blling output is exactly as the customer desires for each project.

Whether you are buying a car or creating pay applications, stick to the facts. Find the right dealer/systems that deal with the facts. Ensure the workflow is automated and expedites the process so that you are not plagued with their inefficiency.