For any business, having enough operational cash on hand is critical. Without being able to accurately forecast cash flow, making important decisions about the future of your firm or projects is a risky venture at best. So, when it comes to an industry as complex as construction—where maximizing profit and minimizing risk is the goal—accurately forecasting cash flow throughout a project’s lifecycle is essential.
The challenge with forecasting is that it’s often a time-consuming process making sense of scattered data, various spreadsheets, and multiple disconnected processes or systems. For example, some teams lean on reports from their ERP system, then look at buy-out logs and compare against schedule projections. Others rely on their scheduling team to resource load the schedule, then use the scheduling tools bell curve for analysis. In any case, the process is tedious, and by the time you’ve cobbled together all the necessary information from all the different teams, it’s easy to lack confidence in decisions relying on your cash flow forecast.
So, how can your team ensure appropriate forecasts are created to maximize profit?
The answer is Autodesk Construction Cloud. With Autodesk Construction Cloud’s cost management solution, all cost activities are centralized, and teams have the ability to connect the budget to the schedule. And now, with the newest release, Autodesk Construction Cloud improves cash flow forecasting, making it an effortless and accurate process.
Cash Flow Forecasting with Autodesk Construction Cloud
Connecting Cost & Time
Preliminaries and general conditions can vary between projects, especially items significantly affected by specific conditions like restricted access site locations and traffic management. These can typically be circa 10-20% of the project cost.
For the Contractor, there’s little price security from fixed-price Subcontracts that you get when packaging regular construction scope. That means risk is high, and contractors must plan carefully. But with few estimating systems having the functionality to assist in planning these costs, teams have to do it in spreadsheets manually, which runs a high risk of error.
Luckily, Autodesk Construction Cloud’s recently released functionality for planning these method-related management costs enables teams to plan time-based allowances in a visual way utilizing a Gantt chart view. By connecting schedule tasks to budget line items, teams can quickly determine duration then enable calculations for annual price increases. Teams can then use the pricing in the estimate submission. If successful, all the information is set up, ready for tracking and forecasting when the project begins—eliminating yet another spreadsheet from the process.
Built-In Forecast Distribution Curves
Now, with the release of phase 2 of our forecasting functionality, we have added the ability to connect the entire budget so teams can plan and track the project’s cash flow as a whole throughout the duration of the project. Four built-in forecast distribution curves are available, including front-loaded, rear-loaded, typical, and linear. With this, teams can efficiently perform forecast distributions for each budget line item.
When performing distributions to items connected to schedule tasks, dates automatically pull in, but can be altered if necessary. If needed, teams can customize the distribution further by adding or removing date ranges. In addition, teams can easily make edits within the forecast final cost field as they’re making their projections. The system will auto-flag if the distribution total doesn’t match the forecast-final cost; with a click, you can choose to have the system automatically adjust it for you—a graphic representation of the original plan versus the delta displays.
Project Level Cash Flow Analysis
Once all budget line items are forecasted, teams can access a project-level cash flow analysis in the new Forecast tool. Within this view, the information is summarized by revised budget, work completed, actual costs, and forecast-final cost, which can be viewed by period or cumulatively. This real-time summary enables teams to see planned actual and forecast quickly and provides them with the ability to quickly drill down into details if needed. Along with a table of data is a built-in dynamic time-versus-money chart, allowing teams to visualize the project-level cash flow distribution throughout the project lifecycle.
A better way with Autodesk Construction Cloud
Autodesk Construction Cloud is designed to help you make smarter, more meaningful business decisions throughout the entire construction process—from design and planning to building, handoff and operating. We make sure you can connect workflows and teams to the data they need most, when they need to make a decision. Whether that’s improving forecast accuracy, or making valuable information available to stakeholders when they need it, Autodesk has you covered.
If you’re interested in learning more about the latest updates across all Autodesk Construction Cloud products, please check out this article.
The post Improve Cash Flow Forecasting with Autodesk Construction Cloud appeared first on Digital Builder.