Research On Cash Flow Forecasting Of Engineering Contracting Projects

Cash flow is the foundation and premise of project contractors'survival and development, the cash flow's health of project is not only related to the success of the project, but also has significance on the economic benefits of the contractor. In recent years, Construction companies generally reflect that the construction project funds are not sufficient, accounts receivable is gradually increasing, for most of the projects, Accounting profit and the actual financial situation do not match, there is even a phenomenon: accounting surplus, actual deficit Additionally, more and more modern engineering projects tending to have the feature "large investment, long payback period, more uncertainty", the funds control risk of the engeneering enterprises is increasing, cash flow management is becaming more and more important The forecasting of cash flow allows the contractor to know the funding needs of the project in advance, so as to provide a reference for contractors to proactively develop financing plans.This paper takes the projects as study objects, from the perspective of project management, uses the method of literature research, case study, etc, analysis the composition item of the projects' cash flow, separately contructs the cash inflow and cash outflow's influencing factor system, proposes cash flow forecasting operating models and optimization proposals, so as to provide reference for managers to forecast, manage and optimize projects' cash flow.Firstly, this paper defined the projects' cash flow from three dimensions:target system, money received and expended, time. This paper also analysis the characteristics of the projects' cash flow, based on this, analysis and summarizes the targe, process of cash flow management, cash flow forecasting method selection and basic tools. Analysising the composition items of the projects' cash flow and influencing factors is based on the former study.Secondly, this paper separately researches and summarizes projects' cash outflows and inflows from two aspects:the composition and the impacting factors. One impacting factors' system is built separately for cash outflows and cash inflows, on this basis, one forecasting model is proposed separately for the projects' cash outflows and inflow, which including mathematical models and operating procedures, at last, recommendations of how to control and quantify the uncertainty factors are given.Finally, this paper introduces the calculation methon of the net cash flow briefly, and gives several recommendations for optimizing and managing cash flow. The target of cash flow management is not only to ensure the financial security of the project, but also reduce the cost of capital, and ultimately maximize efficiency. The Contractors should establish and improve organization system of cash flow management, performe skills contract management with the owner and subcontractors to ensure that the project can obtain consistent cash inflows as planned, in the same time, arrange the amount and time of cash outflows properly, reduce the frequency and amount of financing, finally obtain stable and healthy net cash flow.