Focus On Cash

Focus On Cash

More construction companies fail due to incorrect financial management than due to profitability of business.

Revenue and expenditures of a construction company happens on more often than one project. Managing cash means to know when does a project need money and when does it generate money. Construction activities use multitude of resources, making dynamic cost distribution over execution times cumbersome. Fuel to fire, cash flow is affected by delays in progress, plant costs and other project changes, in turn requiring an efficient tracking and forecast system that translates such delays and changes to cash impacts. [See limitations in cash flow management on Wikipedia]

Revenue and expenditures of a construction company happens on more often than one project. Managing cash means to know when does a project need money and when does it generate money. Construction activities use multitude of resources, making dynamic cost distribution over execution times cumbersome. Fuel to fire, cash flow is affected by delays in progress, plant costs and other project changes, in turn requiring an efficient tracking and forecast system that translates such delays and changes to cash impacts. [See limitations in cash flow management on Wikipedia]

[Arditi, D., Koksal, A. and Kale, S. (2000) Business failures in the construction industry, Engineering, Construction and Architectural Management, 7(2), 120-132; Kivrak, S. and Arslan, G. (2008) Factors causing construction company failure, Building Abroad, October 2008, 297-305; Davidson, R.A. and Maguire, M.G. (2003) Top common causes of construction contractor failures, Journal of Construction Accounting and Taxation, Jan/Feb 2003.]