Cash flow forecasting in construction project

Abstract

This research introduces the development of a project-level cash flow forecasting model in construction stage based on the plamed earned value and the cost from a general contractors view on a jobsite. Most previous models have been developed to assist contractors in their pre-tendering or planning stage cash flow forecasts. The critical key to cash flow forecasting at the project level is how to build a cash-out model. The basic concept is to use moving weights of cost categories in a budget over project duration. The cost categories are classified to compile resources with almost the same time lags that are based on contracting payment condit ions and credit times given by suppliers or venders. For cash-in, net planned monthly-earned values are simply transferred to the ca sh-in forecast, to be applied there with billing time and retention money. Validation of the model involves applying data from on-goi ng4 projects in progress for 12 months. Based on the results of the comparative analyses through the simulation of the proposed mod el and the existing models, the proposed model is more accurate, flexible and simpler than traditional models to the employee of construction jobsite who is not oriented financial knowledge.