Cash flow
The cash flow forecast
Projects do not fail because they were unprofitable. They fail because the money went out before it came in, and nobody had modelled the gap.
QScope Team·4 min read
It builds itself
There is nothing to enter. Every certificate already carries a valuation date, a due date and a final date for payment, and the forecast is what happens when money is put against those dates.
- Open Cash Flow.
- Set the payment behaviour you actually see, from on time to thirty days late.
- Choose how the remaining work is spread: an S-curve or evenly across the remaining cycles.
The peak is the answer
The deepest point of the cumulative line is the sum that has to be funded. That is what the forecast exists to produce, and it is a number a snapshot of today cannot show you, because the peak is usually still ahead.
What it does not include
This is the cash flow of the contract: receipts from client certificates against payments to subcontractors.
It does not include your own labour, plant, overheads or tax, because QScope does not hold them. That is stated on the screen rather than left for you to discover.
The payment cycle differs by contract and country
The forecast places each receipt on the payment date the contract form produces. A UK final date for payment falls around a fortnight after the due date. Under FIDIC the Employer pays within 56 calendar days of the Engineer receiving the Statement, counted in calendar days with no payment or pay-less notice, which pushes the peak further out.
The tail
Retention and an unagreed final account keep the position negative long after practical completion. A forecast that turns positive at handover is usually wrong by exactly that amount, which is why the forecast runs past the last certificate.