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To manage is to forecast and plan, to organize, to command, to coordinate and to control. - HENRI FAYOL

Cash Flow Forecast for Sample Project

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The above sample Construction Budget Report is produced for the following assumed data input:

Project Title: Sample Project
Project Start: January 01, 2014
Project Finish: January 01,2015
Estimated Cost of the Works: 100,000
Overheads Percentage: 10%
Profit Percentage: 10%
Retention Percentage: 5%

The Construction Contract amount for the sample project will thus be: (100,000 + 10,000 ) x 1.10 = 121,000

As per characteristics of the Time Cost relation established by the S-curve analysis we will have the following milestones: Assuming a lag of one month between applying for payment and actual receiving of it by the Contractor - as a normal practice in the industry - the Cash In curve shall be shifted to the right by one month.
Half the retention money shall be released upon completion of the works and the other half shall be released upon taking over. It should be noted also that the Net Cash Flow (the right column in the table) shall be positive by receiving payment due on December 31, 2104. This is the date after which the project is considered self financing. Had the profit percentage been greater than the assumed 10%, the construction budget would have improved and an earlier self financing date could have been reached. However the risk of raising the profit percentage is clearly the Contract being awarded to another Contractor.

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