Construction businesses face a unique cash flow challenge: you spend money long before you get paid. Labour, materials, and plant hire go out the door every week, while progress claims, retentions, and variations trickle in on their own schedule. Without a forecast, you're flying blind.

A cash forecast isn't complicated accounting — it's simply a week-by-week or month-by-month picture of money coming in and money going out. Here's how to build yours in five steps.

Start with a clear picture of every active and upcoming project. Break each one into phases — mobilisation, structural work, fitout, and handover. Assign realistic start and end dates to each phase.

This timeline becomes the backbone of your forecast. Everything else — when you'll spend, when you'll invoice, when you'll get paid — flows from it.

Inflows are the money coming into your business. In construction, these are rarely evenly spread — they cluster around progress claim dates, milestone completions, and variation approvals.

For each project, map out when you expect to submit each progress claim and — critically — when you realistically expect to be paid. If your contract has 30-day payment terms, your cash doesn't arrive the day you invoice.

Outflows are everything your business spends. In construction this includes direct project costs — labour, subcontractors, materials, equipment hire — as well as overhead costs like insurance, vehicles, office, and your own wages.

The key is to forecast outflows based on when you actually pay, not when the cost is incurred. If you have 14-day terms with a subcontractor, the cash leaves your account two weeks after they complete the work.

Now bring it together. Take your opening bank balance, add each week's inflows, subtract each week's outflows, and you have your closing balance — which becomes the next week's opening balance. Repeat across your forecast horizon (13 weeks is the sweet spot).

This running balance reveals the gaps — the weeks or months where outflows will exceed inflows. These are your danger zones, and seeing them four to eight weeks out gives you time to act: negotiate better payment terms, arrange a finance facility, or delay a discretionary spend.

A forecast is only as good as its last update. Every week, replace your estimated figures with actuals — what did you actually receive, what did you actually spend? Then re-project the remaining weeks based on what you now know.

This weekly rhythm turns your forecast from a static spreadsheet into a live decision-making tool. Over time you'll get better at estimating — your forecasts will become more accurate and your business more predictable.

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