Cashflow example.docx - Project Cash flow You have been...

Project Cash flow
You have been asked to cashflow the costs and income for your tender and advise the accountants:
1. The maximum and average finance that will be required to fund the proposed contract &
2. and for how long finance will be required.
You have checked the client’s tender documents and payments will be made monthly as follows:
 At the end of the month (month 1) the work done is measured and submitted for payment
within the next month (month 2).
 The clients project manager will then assess the claim in the following month (month 3).
 Payment of an authorised claim will be in 30-60 days (by month 5)
The company has an excellent relationship with its suppliers and sub-contractors and pays all
invoices within 30 days.
Your estimate of cashflows based on when the work is performed and consequent claim on the
client, is as follows:
Month Expenses Direct COP Total
1 10,000 3,500 13,500
2 20,000 7,000 27,000
3 37,000 12,950 49,950
4 49,000 17,150 66,150
5 66,000 23,100 89,100
6 86,000 30,100 116,100
7 110,000 38,500 148,500
8 118,000 41,300 159,300
9 125,000 43,750 168,750
10 124,000 43,400 167,400
11 130,000