In the construction business, where large payments
are often tied to job progress, poor cash management
can lead to trouble, even in a profitable company.
The key is a cash-flow budget, which is
nothing more than a schedule of expected cash inflow
and outflow. More important,
it predicts your net
cash position at any given
point in time. This budget will tell you if you need to
borrow money and how much, or if you have the
excess cash to give your crew a bonus or to buy a new
piece of equipment.
By following a few simple steps, small contractors
can develop a cash budget that will meet most