Last edited 06 Oct 2020

Cash flow projection

The cash flow projection sets out when costs will be incurred and how much they will amount to during the life of a project.

Predicting cash flow is important in order to ensure that an appropriate level of funding is in place and that suitable draw-down facilities are available.

Until the main contractor has been appointed, cash flow projections are likely to be based only on agreed fee payment schedules for consultants and a simple division of the construction cost over the likely construction period (or perhaps an allocation of construction cost over an s-curve distribution). It is only when the main contractor is appointed, a master programme prepared and some form of payment schedule agreed that cash flow projections become reliable.

Cash flow projections may be affected by the need for the early purchase of long-lead time items or by items that the client may wish to purchase that are outside of the main contract (such as furniture or equipment).

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