Construction businesses often operate on thin margins and long project cycles. Managing cash flow is critical.
Project‑based forecasting. Each project has unique payment schedules and costs. Build a cash‑flow forecast for each job, including expected payments and expenses. This helps identify gaps when expenses exceed incoming payments.
Include retention and change orders. Retainage and change orders often delay payments. Factor these into your forecasts so you’re not caught off guard.
Use draw schedules. Align your billing schedule with project milestones. This ensures you get paid as work is completed.
Plan for seasonality. Weather and market cycles affect construction. Cash‑flow forecasting helps you plan for slow periods and allocate resources.
By focusing on “cash flow forecasting for construction companies,” you can anticipate shortfalls and make informed decisions about hiring, equipment purchases and new projects.
