Build a rolling cash forecast that follows how your firm bills, collects, and pays. Begin with the cash available today, then map expected receipts and payments by date. A forecast is useful when it shows timing, not just totals: a profitable project can still leave the firm short if payroll comes due before the client pays.
For receipts, list each invoice or expected billing separately. Record the amount, expected billing date, payment terms, collection history, and confidence level. Separate signed, authorized work from proposals and unsigned awards. For payments, include payroll and benefits, payroll taxes, insurance, rent, software, subcontractors, debt service, taxes, owner distributions, and planned equipment purchases. Add irregular costs such as annual insurance premiums or license renewals so they do not arrive as surprises.
Use your own collection history to set realistic receipt dates. If a client often pays after the stated terms, reflect that pattern and ask the project manager whether a billing milestone may move. Track retainage, disputed invoices, unapproved changes, and work that cannot yet be billed. For each major project, compare the billing schedule with the expected labor and subcontractor costs.
Prepare at least one slower-collection case and one case with reduced or delayed new work. For example, if two large invoices move into the next month, what happens to payroll, planned hiring, and owner distributions? Label assumptions clearly. Check available credit and any lender conditions with your CPA and lender, and ask what reporting or cash minimums apply.
Set a regular review date, such as each month, and update the forecast when a contract is signed, an invoice is delayed, staffing changes, or a major expense is approved. Assign someone to explain material differences between forecast and actual cash.
This forecast is a planning aid, not a promise of future cash. This is general education, not accounting, tax, legal, investment, or engineering advice; licensed PE judgment and local codes govern.
