Cash Flow Options

The Cash Flow Options are used to define the cash flow rules (revenue timing, cost timing, cost of money, and quantities) needed to calculate the finance expense and cash flow for your project.

Cash flow rules (revenue timing, cost timing, cost of money, and quantities) describe how cash flow occurs between a contractor and a client, and between contractors or owners and vendors/subcontractors. Cash flow is then calculated based on both the earning and payment terms you specify, and the job's schedule and pay item prices.

To open the Cash Flow Options, click on the Cash Flow Options icon in the Tools section of the Actions tab.

You can also access Cash Flow Options from the Setup > Job Properties > Cash Flow tab.

  1. Revenue timing:  Revenue is the amount of money actually paid to a contractor by the client for the completion of project deliverables. This section contains options to specify when and how often payment is recieved.

  2. Cost Timing:  Cost is the amount of money expended to complete the scope of the project. This section contains options to specify when and how often you pay contractors, subcontractors and vendors.

    To include any of your costs in your cash flow (including indirect costs), they need to be scheduled

  3. Cost of Money:  Represents the financing cost to fund the project. This section contains fields to specify interest rates you pay for the money you borrow, and interest rates you earn for money invested, to determine a total Finance Cost.

  4. Quantities:  Allows you to calculate cash flow based on pay quantities or forecast (T/O) quantities.

  5. Dates:  By default, the scheduled Early Start and Early Finish dates of each cost item (and its resource employments) as listed in the CBS Register, provide the timing of the expenses, revenue, and costs that show up on the Cash Flow graph. You have the option to base cash flow timing on Start/Finish dates or Late Start/Finish dates.

Cash Flow Options Set Up

The following steps walk you defining settings on the Cash Flow Options form.

Step by Step — Cash Flow Options Setup

  1. In the E101 – Training Job, from the Estimate tab, select Setup >Job Properties >Cash Flow.

    • You will see the default options already there

    • You will adjust a few of those options

  2. Change your Revenue timing to Every month on the 10th.

    • The average calendar days from billing to collection should be set to 25 days

  3. For Cost timing, bills are received from subcontractors and vendors Every month on the 25th.

    • Average calendar days elapsed from receipt of invoice to payment should be set to 30 days

  4. For Cost of money, enter 10% for the Average annual interest rate paid to borrow money (when cost exceeds revenue) and 2% for Average annual interest rate earned (when revenue exceeds cost).

  5. Leave all remaining options as originally defaulted.