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Cash Flow - Keep Water Out of the Bottom of the Ship
A cash flow problem is a drag on the performance of a construction firm. Just as a foot of water in the bottom of a ship would cause it to ride lower, move slower and be a foot closer to sinking, it is problematic. Cash flow is a primary economic factor whether a contractor does well or not. Understanding this issue can keep your company profitable and thus, make your management easier.
How important is understanding cash flow? It is a top five issue. Why? Negative cash flow is the leading predictor of construction contractor bankruptcy.
For the rest of this chapter, read my book, Managing a Construction Firm on Just 24 Hours a Day (McGraw Hill, 2007, 406 pages). To order our book, go to any major outlet i.e. Amazon, Walden Books, Barnes and Noble, Reiter's. Brown's Stationers (UK), Borders, Booktopia (AUS) and other fine book retailers. You may order the bundle of book, 50 MS Excel Templates (featured in the book) and 55 e-classes at www.stevensci.com - click on the book image.
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Matt Stevens is a management consultant who works only with construction contractors. He has performed training and business consultation for the contracting community since 1994. Matt can be reached at mstevens@stevensci.com.
search terms: Pre-construction, post-mortem, lessons learned, Financial Managment, Accounting, Cashflow, payment, recievables, Return on Investment
Posted by Matt Stevens at September 18, 2008 9:13 AM
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Comments
hi,
As I keep reading, your articles get more intresting. There are many things in buisness that can easily be overlooked.
thank you
denis
Posted by: d.seguin at November 10, 2005 8:59 AM
fantastic
Posted by: stephen at November 12, 2005 8:17 PM
what is construction cash flow and what is the important of cash flow?
Posted by: sk.ng at May 22, 2006 10:50 PM