Construction Cash Flow Forecasting

See cash gaps in your building business weeks before they happen, while there's still time to act

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Construction cash flow forecasting dashboard showing projected cash position across multiple projects

Profit Isn't Cash

You can be profitable on paper and still scramble to make payroll. Clients take weeks to pay progress claims, subcontractors want paying sooner, suppliers want money before they deliver, and retention money sits out of reach for months.

Every month you check the bank balance and wonder if there's enough. Supplier payments get delayed to cover wages, new projects get put off because you're not sure you can fund the early costs, and decisions are made on gut feel.

The reality: Plenty of builders with full order books still go under, because the cash arrives too late to cover what is going out. Construction regularly tops ASIC's company insolvency statistics, and cash flow timing is a common thread.

Could You Answer These Questions Today?

Illustration: A Builder With 5 Active Projects

Contract Value

$8.7M

Claims Outstanding

$2.3M

Retention Held

$385K

Subbies Due (30d)

$1.1M

Wages (30d)

$280K

Materials On Order

$420K

Questions the forecast answers:

When will the $2.3M in outstanding claims actually turn into cash?
Can we cover $1.1M in subbie payments next month if two claims are late?
Which project is using cash fastest compared with what it has claimed?
What is the lowest our bank balance will get in the next 8 weeks?
Should we delay the new project start or arrange bridging finance?

Without a forecast, answering these takes hours in a spreadsheet. With one, the answers are on a dashboard updated daily from your accounting and construction data.

A 13-Week Forecast Driven by Your Claim Schedule

A construction cash flow forecast built from the accounts runs a month behind, because the accounts only know what has already been invoiced and paid. Next month's claims aren't in there yet, a subcontract signed last week won't show until its first bill, and retentions sit as a balance with no date.

So we build the forecast from the jobs instead, week by week for the next 13 weeks, and refresh it every week from your job system, claims and accounts. Each job contributes:

The claim schedule

When each progress claim goes in, by job, and roughly how much, from the contract and the job program. This drives almost all of the cash coming in.

When each claim is actually paid

The payment due date under the contract and your state’s security of payment rules, then adjusted for how that client really pays. A client who always pays on the last allowed day, or a week late, is forecast that way.

Retentions

Retention your clients hold comes back at practical completion and the end of the defects period, so those dates go in as receipts. Retention you hold from subcontractors goes back out on the same kind of dates.

Committed costs

Every signed subcontract and purchase order, the amount still to be billed, and the week the payment falls due under your terms and your pay-run days.

Cost to complete

What hasn’t been ordered yet (labour, materials, later trades), spread over each job’s remaining weeks using WIP and the program.

Wages, overheads and tax

Pay runs, super, rent, insurance, loan repayments and BAS, on the dates they actually fall.

An example forecast

Illustration only: a made-up builder with five active jobs, figures in thousands of dollars, opening bank balance 300.

Week	Claims paid in	Retention back	Subbies and suppliers	Wages	Overheads and tax	Closing balance
1	–	–	80	45	15	160
2	640	–	300	45	15	440
3	–	–	60	45	120	215
4	520	–	330	45	15	345
5	310	–	60	45	15	535
6	–	–	380	45	15	95
7	–	–	20	45	15	15
8	590	–	300	45	15	245
9	280	95	60	45	15	500
10	–	–	290	45	15	150
11	300	–	60	45	15	330
12	590	–	300	45	15	560
13	–	–	60	45	15	440

The bank balance looks fine in week 5. The forecast shows why it won't stay that way: a large subcontractor run lands in week 6, and the next big claim (for Job B) is due on the last day of week 7, from a client who usually pays a few days late. Week 7 is the low point. If that payment slips into week 9, week 8 goes negative.

Seen in week 1, that gives you six weeks to act: get Job B's claim in early, check the payment schedule arrives on time, move a materials order back a week, agree the timing of the week 6 subcontractor run, or talk to the bank before you need to. Seen in week 6, the only option is a phone call you'd rather not make.

The week 3 tax payment and the week 9 retention release are there because they were entered with a date, not left as balances. That is most of what separates this from a forecast rebuilt from the accounts.

How Payment Schedule Deadlines Feed the Forecast

Under each state's Security of Payment Act, a payment claim starts two clocks: the time the other party has to give a payment schedule, and the date payment is due. Both are set by the contract within limits in the Act, and the limits differ between Queensland, New South Wales and Victoria. The forecast uses them like this:

Claim date. From your claim schedule, which follows the contract and the program.
Payment schedule deadline. Calculated in business days from the claim. When a schedule arrives for less than you claimed, the forecast drops to the scheduled amount and the difference is flagged for follow-up. When no schedule arrives by the deadline, that is flagged too, because it changes your position under the Act.
Payment due date. The date the cash should land, which is where the claim first appears in the forecast.
Actual pay lag. Each client's payment history moves the receipt to when they really pay. The gap between due and actual is worth watching on its own.

The same clocks run the other way on claims your subcontractors send you: your payment schedule deadline and your payment date become dated outgoings. Missing a payment schedule deadline on a subcontractor's claim can leave you owing the full amount claimed, so the forecast and the claims register share the same dates. Business-day counting also stretches deadlines over the Christmas break, which matters in a forecast that spans December and January.

The rules, deadlines and recent Victorian changes are set out in our guide to progress claims, payment schedules and retention tracking across Qld, NSW and Victoria. For your own contracts, check with a construction lawyer.

When a spreadsheet is enough

With a handful of jobs and one person who updates the claim schedule and commitments every week, a well-built spreadsheet does this job. Our article on building a 13-week forecast from WIP and your claim schedule shows the structure. It is worth automating when there are many jobs, the inputs come from several people and systems, or the forecast is only rebuilt at month end because nobody has time to keep it current.

Seven Cash Flow Killers in Construction

Common cash flow problems and how forecasting helps with each one

Numbers a Month Behind

WIP and the forecast are rebuilt at month-end close, so decisions are made on figures that are already weeks old

Solution: A forecast refreshed weekly from live job costs, the claim schedule and WIP

Late Progress Claims

Claiming monthly instead of at each milestone delays payment for work already done

Solution: A prompt to claim as soon as a milestone is reached

Slow Client Payments

Clients often take well beyond contract terms to pay progress claims

Solution: Forecasts based on when each client actually pays

Front-Loaded Costs

Materials are paid for weeks before you can claim for that work

Solution: Time purchasing around your claim schedule

Retention Building Up

$50K-$150K tied up in retention for every $1M of contract value

Solution: Retention releases tracked and included in your cash forecast

Variation Delays

Variation work done but not claimed for weeks or months

Solution: Approved variations tracked so they are claimed straight away

Seasonal Slowdowns

The December-January shutdown brings overheads but no progress claims

Solution: Plan for the slow period and build cash reserves ahead of it

Where Forecast Data Comes From

We connect to the systems you already use, so nobody has to enter anything new

Xero

Invoices, bills, bank balances, payment history, aged receivables

MYOB

The same accounting data as Xero, including how each client pays

Procore

Committed costs, budget forecasts, variations and progress claim schedules

Buildxact

Project budgets, purchase orders and progress claim amounts

Simpro

Job costs, quotes, purchase orders and work in progress

Bank Feeds

Your actual bank balance and transactions, to check against the forecast

Related Services

Cash Flow Forecasting Solutions

Cash flow forecasting for any type of business

Construction Financial Visibility

See the money across all your projects in one place

Unified Business Dashboard

All your construction data on one dashboard

Frequently Asked Questions

Because the timing is harder than in most businesses. Materials are paid for up front, progress claims are paid weeks after they go in (within limits set by security of payment law), and clients do not always pay on time, retention can be held for 12+ months, and several projects are at different stages at once. A profitable builder can still go under simply because cash arrives too late. A forecast shows the gaps weeks or months ahead, while there is time to arrange bridging finance or change payment schedules.

We connect to your accounting system (such as Xero or MYOB) and your construction software and pull in committed costs, upcoming subcontractor payments, progress claim dates, retention releases and overheads. The forecast sets the cash coming in from claims and client payments against the cash going out to suppliers, staff and subbies, and shows your expected bank balance week by week for the next 13 weeks.

Yes. The forecast uses each client’s payment history to work out when they will actually pay, so if a client usually pays 15 days late, it allows for that. You can also test scenarios, such as “What if the $450K progress claim on Project B is disputed and paid 30 days late?”

Retention, typically 5-10% of each progress claim, ties up a lot of cash. On a $3M project with 5% retention, $150,000 is held back until practical completion. We track retention on each project, estimate when it will be released and include it in your overall cash position. Many builders underestimate how much cash is tied up in retention across all their projects.

Access to Xero or MYOB, your construction software if you have one, and your project schedules. We can build a useful forecast from Xero or MYOB alone; adding claim schedules, committed costs and subcontractor payment terms from your construction software makes it much more accurate.

It depends on the quality of your data, and the next few weeks are always more reliable than further out. The forecast improves as it picks up your payment patterns, seasonal swings and how each client pays. The point is not perfect accuracy but early warning: knowing a gap is coming weeks ahead, even roughly, gives you time to act.

See Cash Gaps Before They Happen

Start with a free initial chat about how you track cash flow today and what you need to see coming, so you know, rather than guess, whether you can cover next month's bills.

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Part of our guide: Construction Finance Systems Guide