Cash Flow Forecasting for Construction Businesses
Forecasts aligned to claim timing, WIP movement, retentions and funding constraints.
Most construction forecasts fail for one reason. They do not reflect project timing. Cash moves on claims, approvals, retentions and payment behaviour. A forecast needs to be built around those mechanics or it will mislead decision-making.
Book a Strategy Session
Call (07) 3063 3373 or book directly.
When you need Cash Flow Forecasting
- Facility headroom is tightening and you want visibility before it constrains operations
- WIP is growing and cash is not moving with it
- Retentions are building across multiple jobs
- Claims are being paid late or inconsistently
- You are taking on larger projects and timing risk is increasing
- Hiring, plant purchases or subcontractor commitments depend on cash timing
What a usable construction cash flow forecast looks like
A usable forecast is decision-grade. It ties cash to project timing and it reflects constraints. It also makes problems visible early enough to preserve options.
- Forecast cash based on claim cycles and expected payment windows
- Model retention accumulation and likely release timing
- Track WIP movement alongside billing behaviour
- Show facility headroom and known covenant pressure points
- Identify timing gaps before they become shortfalls
Inputs we use
Forecasting quality depends on inputs that reflect how construction cash actually moves.
- Project list, contract values, timelines and claim schedules
- Expected payment behaviour by client and contract
- Retention terms and retention held to date
- WIP position and billing status
- Supplier and subcontractor payment terms
- Facility terms, limits, drawdown mechanics and repayment profile
- Known cost movements, including labour and materials pressure
What you get
- A rolling cash flow forecast aligned to project timing
- Clear visibility of projected shortfall periods
- Decision triggers tied to facility headroom and cash coverage
- Priority actions to reduce timing gaps and stabilise working capital
- A structure you can maintain without rebuilding it each month
Scenario planning
Scenario planning matters because timing shifts in construction are normal. The forecast needs controlled options.
- Claim paid late
- Variation delayed
- Retention release pushed out
- Cost acceleration during delivery
- New project start creating upfront cash draw
- Facility constraint tightening earlier than expected
Legal and commercial crossover
Forecast pressure often ties back to contract mechanisms. Payment terms, variation processes and retention clauses affect liquidity timing. Where contractual rights and enforcement strategy are relevant, legal and commercial alignment matters.
FAQs
What is Cash Flow Forecasting in construction?
Cash Flow Forecasting in construction is a forward model built around claim timing, payment behaviour, retention movements, WIP exposure and funding constraints so directors can see pressure before it constrains decisions.
Why do construction cash flow forecasts fail?
Construction cash flow forecasts fail when they rely on accounting timing instead of project timing, or when they ignore retentions, WIP movement and realistic payment windows.
Does this include insolvency or Small Business Restructuring advice?
This work focuses on forecasting and working capital control. Insolvency advice and formal Small Business Restructuring advice are separate specialist areas.
Can the forecast be maintained without constant rebuild?
A forecast can be maintained when it is built around consistent inputs, controlled assumptions and a structure that matches the way claims and receipts operate in your business.
Next step
Book a Strategy Session: Call (07) 3063 3373 or book directly.