Construction Management

Construction Estimating and Finance Management Software

CFF3 Software for construction loan estimating software for construction management (Cash Flow Forecasting) enables contractors and construction loan providers to quickly and confidently produce cash flow forecasts and update them periodically along the construction project life.

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CFF3 Software - Technical Support

Start a new Project: Project Title
You may start a "New" project by selecting New from the Project menu and will then be prompted to enter your project title. The file allocated to this title by default contains the contract conditions set for the Example project. You may alter any of these by editing "contract conditions" from "Edit" menu. You may save any project file under a different project title by selecting Save As from the Project menu and will then be prompted to enter your new project title. The file allocated to the new title is identical to the one you were working with title exception.
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Modify Contract Conditions:
To proceed with your new project you need to modify default figures allocated to your project as contract conditions. These include start and finish dates, estimated direct cost, overhead percentage, and profit percentage. Also conditions pertaining to Cash in (from Employer) and Cash out (Labor wages, equipment rent, materials, and sub-contractors). You need to fix a regularity order for both cash in and cash out. Cash in regularity is normally pre-set by Contract with employer. For Cash out regularity you may select the most likely order subject to your accounting system.
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Actual Cash In
To enter an actual payment received from employer, select Actual Cash In from the Edit menu, then move the cursor inside the box corresponding the date (as determined by regularity that you have saved earlier) and enter the actual amount received. An updated estimate is produced for next payments to be received each time you enter an actual payment received. You can view this updated estimate versus initial estimate by selecting Cash flow estimate from the View menu
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Actual Cash Out
To enter an actual cost incurred, select Actual Cash Out from the Edit menu, then move the cursor inside the box corresponding the date (as determined by regularity that you have saved earlier) and enter the actual amount incurred. An updated estimate is produced for next cash out amounts to be spent each time you enter an actual cost incurred. You can view this updated estimate versus initial estimate by selecting Cash flow estimate from the View menu
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Cash Flow Forecast
To view cash flow forecasts select Cash Flow Estimate from the View menu. Both initial and updated estimates will appear in the table.
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Graphs
To view a graph of "Cash in", "Cash Out" or "Cash Flow" select it from the View menu.
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How it works?
The technique upon which CFF3 is based is the S-curve relation between cost and time as fully described by Cooke and Jepson (1979). The pattern is value accrual being based upon the cost accrual over the project duration (i.e. pre-contract costs are recovered as part of overheads). However this version (version 3) allows for actual cost and actual payment received to produce updates to initial forecast, thus giving closer figures to reality for periods ahead.
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How estimates are updated?
Since pricing policy adopted by contractors may differ (e.g. greater margin and profit could be assigned to earlier activities) in addition to human errors, over measurement as as well as under measurement which are likely to occur in preparing invoices during the course of construction, the actual cash in and cash out could be shifted up and down the S-curve. The shift at any date is assumed to form a damping wave around initial S-curve such that this shift is nullified at completion date. However if the shift is too large and damping wave would result in a negative net payment on a certain date a zero payment is assumed on that date and the start of the wave is shifted horizontally
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How much Finance is required?
To see How much Finance is required select "Cash Flow Estimate" from View menu. The negative figures in the "Net Cash Flow" columns represent situations where cash out is greater than cash in and hence external finance is required. The greatest negative figure is the maximum amount required.
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