Reviewing projects we find many instances of poor cash management.

  • Lengthy payment terms;
  • Payment terms with your subcontractors / suppliers not aligned with your contract terms;
  • Poor valuation control;
  • Retention’s left uncollected;
  • Condition precedents for payment that are difficult to achieve left in contract;
  • Payment protocols not followed;
  • Change not captured/claimed;
  • No cashflow forecast produced at tender stage to show whether the project would be cashflow positive;
  • Tender price/programme slashed in order to win work.

We could keep on, but you get idea.

The reality is it’s pretty simple to avoid these issues:

  • At tender stage do a cashflow forecast, do you really want a project that will be cashflow negative;
  • Negotiate your contract so it’s fair. Be realistic with yourself, if you don’t understand contract employ someone who does;
  • Understand your contract. If you follow the instructions in the contract a majority issues disappear. This is not contractual – its good contract management;
  • Keep accurate/detailed records. In a dispute/claim situation the side with the best records has the upper hand;
  • If you slash prices/programme to win work on an already competitive bid what do you think is going to happen?