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Construction glossary
Construction Glossary •

Cash Flow Projection

What is a Cash Flow Projection?

A Cash Flow Projection in the construction industry is a financial document that estimates income and expenditure of a project over a specific period of time. This projection tool helps construction managers to anticipate revenues, costs and possible shortfalls. This anticipation is crucial for construction projects, which can be resource-intensive and cost-laden with potentially varying income streams, especially in long-term projects. Utilizing a cash flow projection enables the company to plan and budget funds accordingly. It helps to forecast financial needs, spot potential financing gaps, manage resources efficiently and ensures continuous operations to meet project deadlines. The projection contributes in making informed decisions regarding purchasing materials, subcontracting labor, and managing other direct and indirect costs. Accuracy in these projections can make a significant difference in profitability and sustainability of a construction business.

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Other construction terms

Transmittal

What is a Transmittal?

A Transmittal, in the construction industry, is an important communication tool used for conveying information related to the project. It serves as a formal method of passing on documents, drawings, o...
Bond

What is a Bond?

A bond in the construction industry is a type of surety bond, which serves as a financial guarantee for project completion. It safeguards the interests of stakeholders such as project owners, supplier...
Risk-Shifting Mechanism

What is a Risk-Shifting Mechanism?

A Risk-Shifting Mechanism in the construction industry involves the transfer of potential financial risk from one party to another. Traditional contracts often place the responsibility for risks on th...

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