Cash Flow

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Broadly speaking, Cash Flow is movement of money (payments incoming and outgoing). It is usually a pictorial representation of when costs will be incurred and how much they will total during the life of the project. It let’s the CFO/Finance Department know in advance to be prepared for (and adjust) scenarios. Being able to service project requirements (cost-wise) and at the same time maintaining liquidity is essential for any enterprise be it the Client or Contractor. It helps make sure suitable funding is always in place to service payments and also helps spread a company’s financial resources over time and projects. Makes even more sense for finance departments dealing with multiple projects.

A cost loaded schedule is needed to generate cash flow. In general, cost loaded schedules generate the incoming portion of the cash flow only. A proper cash flow should also include the outgoing portion (initial set up costs, advance payments for procurement items, etc.) This obviously needs a humongous amount of coordination and efforts for just one schedule and is more often than not, not done. For general practice, what’s discussed above may suffice.

In a cost loaded schedule, go to View > Show on Bottom > Resource Usage Profile. Right click anywhere in the profile, select options and choose Cost under the Data tab. You can also select to show the cost histogram (By Date) or S-Curve (Cumulative) or both.

Alternatively, to generate a spreadsheet instead of a profile: View > Show on Bottom > Resource Usage Spreadsheet. Right click in the spreadsheet, select Fields and from the pop-up options box select appropriate data to show. This spreadsheet can also be copied in excel to combine with other enterprise information and generate more charts.

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