The unprecedented turmoil organizations have faced in the past 18 months has put cash flow under the microscope, highlighting the need for more accurate and efficient forecasting moving forward.
This is particularly true for capital projects, where millions of dollars in budget can come into play daily.
Capital projects are inherently complex, with numerous phases, tasks, team members, and suppliers to manage. On top of that, you need to make sure the required funding is available on time to ensure each project stays on track.
When you have a portfolio of projects to manage, that complexity only gets multiplied. So it’s easy to understand how difficult it is to reliably predict your cash flow requirements—potentially resulting in missed payments and timelines, not to mention the financial interest lost on investment funds moved too early.
Improving Cash Flow Forecasting Efficiency and Accuracy
Organizations invest a lot of time and energy into forecasting. When the forecasting process is manual, that effort is often spent entering and manipulating data instead of analyzing and interpreting it—forcing reactionary responses instead of proactive decisions.
Accurate and efficient cash flow forecasting gives you a clear understanding of your long-term forecast and spend and confidence in your ability to get projects done on time and within budget.
Building Your Cash Flow Forecast
A cash flow forecast can be generated for any time period, from monthly to quarterly or annually.
The best way to determine how often you should forecast is to look at your business objectives, how often your senior management team requires reporting, and what level of granularity your team is managing their project data.
Once you’ve determined how often to forecast, the next step is to construct a cash flow forecast that creates visibility and allows you to use your cash more effectively.
Projecto Customers Know Cash Flow Forecasting
Since cash flow forecasting isn’t an exact science, you can learn a lot from other capital project managers.
“We have within the individual projects in Projecto cashflow data that includes the actual spend to date and the future spending forecast. So this is a one-stop shop that has all that information together. The actuals are one color, the forecast another color, and it’s split into tabs on the screen so you can look at them separately.”
Our Projecto Cash Flow Forecasting Module increases financial visibility and control, allowing you to foresee different scenarios and more precisely predict what cash will be coming in and going out over a specific period of time.
With this information in hand, you can mitigate risk and make more proactive and informed decisions, enhancing your capital program’s overall efficiency and boosting your bottom line.