Resource-based model for automatic cash-flow forecasting

Abstract

The paper discusses different approaches to, and models for, project level cash flow forecasting. The importance of cash flow management, both at the project and at the company level is also discussed. The paper presents a resource-based computerized cash-flow forecasting model. The main issue addressed by that model is the solution of the compatibility problem caused by the different data structures of the cost and the schedule items. The cost items are normally specified in terms of the project's physical elements (e.g. slab, beam, column, etc.), while the schedule is expressed in terms of activities (e.g. formwork erection, rebar erection, rebar placement, concrete pouring, etc.). The proposition is the automatic integration of the bill of quantities, the estimate and the schedule databases, using a non-project-specific database, which is a dynamic component of the model. The integration algorithms are presented. Additional issues addressed by the model are time lag and billing period adjustments, material supply policies, anticipated real number of working days per month, subcontractors' payments, overhead expenses and income flow forecasting.