Published February 15, 2024 . 8 mins read

In the construction industry, where delayed payments and narrow profit margins are the norm, having a robust cash flow forecast is more than a financial strategy—it’s a survival imperative. The industry’s unique challenges, marked by slow payments and many variables influencing weekly cash balances, make cash flow foresight an indispensable tool for informed decision-making and sustained financial stability.

Traditionally, construction businesses have navigated these financial complexities using manual processes, often relying on familiar spreadsheet tools like Microsoft Excel. However, the evolving landscape of advanced technologies has ushered in transformative solutions, with ProNovos leading the way. This blog serves as a guide, shedding light on the critical importance of cash flow forecasting in construction and delving into the key disparities between ProNovos’ cutting-edge forecasting feature and the traditional Excel-based approach and the rigid free cash flow templates offered online.

The Importance of Forecasting Cash Flow

A construction business’s cash flow forecast is pivotal for project planning, working capital management, risk mitigation, and fostering crucial relationships with suppliers, subcontractors, and lenders. It plays a key role in strategic decision-making, ensuring financial stability, regulatory compliance, and building confidence among clients and investors. Additionally, the forecast aids in debt management, maintains a positive credit history, and enhances market competitiveness, providing a comparative advantage in project bidding and partnerships.

ProNovos vs Excel: Apples vs Oranges

While Excel maintains the status quo in financial analysis, ProNovos offers a more streamlined, automated, and sophisticated cash flow forecasting solution catering to modern construction businesses’ evolving needs. The choice between the two comes down to efficiency, accuracy, adaptability, and timeliness.

ProNovos introduces convenience and efficiency to the transformation of your cash flow. Say goodbye to numbers-overloaded spreadsheets as you leap into an interactive 26-week timeline, offering a snapshot of the past and projecting the next 13 weeks’ cash balance. Experience the week-to-week aggregate of Net Cash Flow within your business, providing real-time insights and enhancing your financial control. With ProNovos, the transition from complexity to clarity is immediate, empowering you with a dynamic tool that simplifies and elevates your cash flow management experience.

Monitor Your Money

Through seamless integration with your ERP/Accounting Software, gain a real-time view into your current trial balance, monitor your available line of credit to ensure your business is drawing money responsibly, and have an always-updating view of your bank accounts.

Beyond Cash Flow Forecasting and into Cash Flow Management

ProNovos, a comprehensive financial management solution, offers features beyond Excel that enhance the cash flow forecasting process. It streamlines payment collection by tracking accounts receivable and payable, ensuring timely transactions. The platform monitors billing activity, tracking percentage billed and identifying invoicing needs. ProNovos also facilitates proactive project management, ensuring that Project Managers routinely update billings and payment information for accuracy. Additionally, it provides a quick snapshot of a project’s financial health, automating the Work-in-Progress (WIP) report for efficient and up-to-date insights, offering a level of financial visibility and control that Excel lacks.

ProNovos offers a wealth of construction financial-specific dashboards and workflows for the C-suite, financial managers, and project managers to safeguard profits and cash flow.

Automated Cash Inflow and Outflow Data

Pulling from your Accounts Receivable and Accounts Payable data, automatically know the projected cash inflow and outflows. Update the projected payment on invoices to proactively spot potential cash shortages and risks. Add inflow and outflow sources such as rent, payroll, travel, and equipment within your cash flow forecast. Set the cash flow by amount, frequency of the transactions, and start to end date.