Construction Management
Project Cash Flow Forecasting: How Construction Software Keeps You Funded from Bid to Closeout
Revenue on Paper Doesn’t Pay the Bills
It’s possible to have a full backlog and still run out of money. Why? Because the timing of costs and billings rarely match. Mobilization, materials, subs and payroll often hit before you can bill and collect. That’s why project-level cash flow forecasting is critical for contractors that want to grow without running into a cash wall.
Building a Cash Flow View per Project
Construction management and accounting software can turn job budgets and schedules into cash flow projections by:
- Mapping cost curves by month or week based on planned work.
- Aligning projected billings according to contract terms, SOV and retainage.
- Factoring in typical collection patterns and payment terms.
This produces a timeline of when cash is expected to leave and enter the business for each major project.
Aggregating Project Cash Flows at the Company Level
Once you have forecasts per job, your construction accounting system can roll them up to:
- Division, region or branch level.
- Company-wide cash needs by month or week.
- Worst-case, base-case and best-case cash positions.
Owners can quickly see if stacking several cash-negative projects in the same period will strain lines of credit.
Incorporating Financing and Draw Schedules
For projects with dedicated financing or owner draws, cash flow tools let you:
- Model draw schedules linked to milestones or percent complete.
- Include interest and fees associated with project financing.
- Predict covenant ratios and borrowing base limits.
This helps you coordinate with lenders and owners so draws align with major cost peaks rather than lag them.
Using Cash Flow Insight to Make Field Decisions
Cash flow forecasting shouldn’t live only in the CFO’s office. When PMs can see the cash profile of their jobs, they can:
- Sequence work to accelerate billable milestones.
- Negotiate better payment terms with subs and suppliers.
- Push for timely change order approvals before adding crews or materials.
Construction platforms that share cash metrics with operations turn finance into a partner, not a “no” department.
Monitoring Actual Cash Performance Against Forecast
Construction accounting software can compare:
- Actual cost and billing curves vs. plan.
- Actual days sales outstanding (DSO) vs. assumed collection days.
- Impact of underbilling, delayed change orders or slow payers.
When gaps appear, leadership can decide whether to slow spending, draw on credit, re-sequence jobs or adjust bid strategies.
Final Thoughts
Construction cash flow forecasting connects the jobsite to the bank account. With project-based projections, rollups in your construction accounting software and visibility for both finance and operations, you can grow your backlog with confidence instead of hoping the bank balance keeps up.
- Top Expert
Nathan Rowan
Program Research, Editor, Expert in ERP, Cloud, Financial Automation
