What is Cash Flow In Construction?
For a main contractor or subcontractor, the cash flow graph of expenses and incomes for a construction project typically follows the work in progress for which the contractor will be paid periodically. The markup by the contractor above the estimated expenses is included in the total contract price and the terms of most contracts generally call for monthly reimbursements (Monthly Invoice) of work completed less retainage.
At the beginning of the construction contract, a considerable sum may have been spent in enabling works. The contractor’s cash out which occur more or less continuously for the project duration is depicted by a piecewise continuous curve while the receipts (such as progress invoices from the client) are represented by a step function as shown below in graph. The clients’ invoices for the work completed are assumed to lag one period behind expenses except that a withholding proportion or remainder is paid at the end of construction. This method of analysis is applicable to realistic situations where a time period is represented by one month and the number of time periods is extended to cover delayed receipts as a result of retention.
What is an s-curve?
An s-curve is a project management graphical tool that displays cumulative data ( e.g. project’s costs, hours, progress, or quantities) against time.
An s-curve is a graph of cumulative man-hours, cost, progress, or other quantities plotted against time.
An s-curve goal is to represent the utilization of resources over the proposed time of the project
Construction Project Cash Flow Template “XLS”
1. A project plan with activities linked together to form a critical path
2. If required the activities are cost & resource loaded
3. A baseline of the activities before the project starts.
4. Actual progress is assigned at regular intervals and optionally, actual costs and actual resource
usage is applied
5. The project is rescheduled to determine a new finish date.
Cash Flow S-Curve (Excel):
-Cash flow S-Curve excel template shows cumulative costs over time
-Cash flow S-Curve template shows the cash flow of the project