Cashflow forecasts

Question 1

What is a cashflow forecast

Answer 1

A document which shows how much moey you expect your business or project to pay out and receive over a set period of time. It can help plan how much you expect to make in sales and also spend in the future.

Question 2

What is a cashflow forecast used for?

Answer 2

Understand the impact on future plans and possible outcomes
Keep track of overdue payments
Plan for upcoming shortfalls
Track whether spending is on target

Question 3

Why is cashflow imprtant for a construction project?

Answer 3

Allows the client to gain an understanding of their financial commitment over a duration of a construction project
Can be used to estimate when external funding may be required
Can be checked against vals to indicate if there are financial difficulties

Question 4

How does a cashflow forecast help a company remain solvent?

Answer 4

They can predict when a business or project has money to pay out and when money is coming in, it can highlight if the business or project will have negative cashflow, meaning they can do something about it in good time