How do you create a cash flow forecast for a construction company?

A cash flow forecast is created by listing income (invoices, payment installments) and expenses (salaries, materials, fixed costs) on a weekly basis. Income and expenses are recorded at their expected realization date, not the invoicing date. The forecast is updated weekly.

Cash flow forecast template — free Excel model for construction companies

Q: What should a cash flow forecast include?

A cash flow forecast should include: opening balance, expected income (invoices and due dates, installment schedule invoices), expected expenses (salaries, materials, subcontracts, insurance, rent) and weekly net cash flow. The forecast is typically prepared for an 8–12 week time horizon.

Q: How often should a cash flow forecast be updated?

A cash flow forecast should be updated at least weekly. The update takes 15–30 minutes. The most important thing is to update realized invoices, new orders and schedule changes. Updating is especially important during active contracts.

A cash flow forecast is a construction company's most important financial tool. This guide covers the structure, creation and updating of a cash flow forecast — with an Excel template to help.

Why is a cash flow forecast essential?

Cash flow The cash flow problem in construction is structural: materials and wages are paid immediately, but income comes with a delay. is the most common cause of payment difficulties for construction companies.

A cash flow forecast reveals cash shortfalls weeks in advance, giving you time to react: negotiate payment terms, speed up invoicing or arrange short-term financing. Without a forecast, cash shortfalls come as a surprise.

Cash flow forecast structure

Opening balance

Bank account balance at the start of the forecast period.

Weekly income

Outstanding invoices with due dates, upcoming billing per payment schedule.

Salaries and social costs

Fixed costs: monthly salaries, hourly wages, pension contributions, social security.

Materials and subcontracts

Variable costs: orders, delivery terms, payment terms.

Fixed costs

Rent, insurance, leasing, accounting, telephone.

Taxes and public payments

VAT remittance, tax withholdings, employer contributions.

Weekly net cash flow

Income – expenses = net cash flow. Negative = cash shortfall.

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Frequently asked questions

How do you create a cash flow forecast?

List income and expenses on a weekly basis. Record them at the expected realization date. Update weekly.

What should a cash flow forecast include?

Opening balance, income, salaries, materials, fixed costs, taxes and weekly net cash flow. The forecast is prepared for an 8–12 week time horizon.

How often is the forecast updated?

At least weekly. The update takes 15–30 minutes. The most important thing is to update realized invoices and schedule changes.

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