Instruments for cash flow management of construction enterprises

Abstract

Introduction. Financial state of the construction enterprise, level of its financial stability, creditworthiness and liquidity depend on the availability of current assets, net cash flow (positive or negative), which is formed in the course of conducting payment transactions.

The subject of the research is the flow of money of the construction enterprise.

The research objectives: identifying the causes of current assets constraints at the construction industry enterprises; using projected cash flow budget and payment schedule as instruments of managing the enterprise cash flow. 

The purpose of the article is to determine the instruments for cash flow management of construction enterprises, taking into account the peculiarities of their activities.

Method (methodology). The article suggests developing projected cash flow budgets and payment schedule to manage cash flows more efficiently (prevent negative net cash flow) based on estimates made by construction enterprises to determine the construction cost. The purpose of the payment schedule is to determine the flow of funds for the next day and the current week as a supplement and detailing of the projected cash flow budget.

Research results. The use of the projected cash flow budget and payment schedule at the construction industry enterprises will help the management team to control the incoming and outgoing cash flows, form the data base for making decisions on the efficient use of funds. It will also promote the search for additional funding sources of the enterprise activity in the period of budget deficit as well as pre-justified investment of capital in the period of budgetary surplus Thus, the formation of projected cash flow budgets and payment schedule can be an important instrument for efficient cash flow management of construction enterprises.

The method of formation of mutually agreed forecast budget of cash flow and payment calendar with definition of indicators of their efficiency in management of cash flows and a financial condition of the enterprise as a whole needs further improvement.

The technique of forming mutually agreed projected cash flow budget and payment schedule along with the definition of their efficiency indicators in managing cash flows and the overall enterprise financial state requires further improvement.