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mothly cash flow

18 replies [Last post]
Wed, 2005-10-26 06:04
Aleli Florencia M...
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how can i have a summary of monthly cash flow on P3?
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Mon, 2005-11-07 23:47
#1
Vladimir Liberzon
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And still sometimes it is necessary to take into account financial restrictions calculating project schedule.
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Mon, 2005-11-07 18:30
#2
Alex Wong
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Thats why in most of the major projects I worked they will employ a project accountant to manage all these. I still suggest the forecast information should be given by a detail resource schedule where the project accountant can utilise and produce a more accurate monthly cash flow

Alex
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Mon, 2005-11-07 09:39
#3
Mario Sanvitale
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Primavera isn’t designed for cash flow reporting. As well as the difficulty with 30, 60, 90 day payment terms, you also have to factor in the date of payment of payrolls, taxes, contractors etc. which may be cost loaded in your schedule and therefore spread on a daily basis, but aree paid weekly or monthly and not at the same time - for example inthe UK net payrolls are usually paid monthly and the tax paid 17 days later. In Europe and the UK, you would need to account for VAT on your purchases where applicable, and on revenue, and then account for remitting the VAT periodically. Cash flow management is usually a function of the finance department of companies, and is probably better left there! Usually when describing project income and expenditure it’s better to follow accounting standards which in most countries would relate to an accruals basis, as mentioned by Alex earlier.
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Sun, 2005-11-06 17:26
#4
Alex Wong
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Sriram

The problem we facing in P3 is some payment is 30days some 60days and some 90 days or immediate. How to produce a accurate cash flow schedule with all these different payment terms.

Alex
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Sat, 2005-11-05 06:54
#5
Sriram Iyer
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Hello,

Cash flow = Inflow & Outflow monthwise

If your payment terms as per Milestone, create seperate WBS.

Otherwise use Cost in P3 for loading the inflow as per your payment terms & Resources for outflow.

Hope this is clear.

Bye,


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Fri, 2005-11-04 01:19
#6
Vladimir Liberzon
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In Spider Project you can create as many cost components and cost centers as necessary and show actual and planned expenses, actual cost and planned payments, difference, etc. for the project, any project phase, any resource, department, subcontractor. Besides you can calculate financial constrained schedule where project activities are delayed if there is not enough money to pay for their execution.
There is a simple example in its Demo version illustrating financial and supply leveling.
Best Regards,
Vladimir
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Fri, 2005-11-04 00:29
#7
Clive Randall
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Alex Vladimir
I export to Excel then hand pick the payment period.
Its not easy but it works
You have to do the same with clients payments and materials on site to get a better picture.
I dont know of a planning software that can delay the payment exactly the way we are seeking here but I would like to know if there is one
Clive
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Thu, 2005-11-03 17:36
#8
Alex Wong
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Vladimir

Again agreed, if possible PM should have one location to obtain the project resource situatio with a cash flow. What Mario is refer to is the expenses incurred may not necessary pay at the same time. Ie 90 days credits or wages. That will cause an inaccurate cash flow. where P3 cannot delay the payment situation (it can lag remaining expenditure but not actual). Is there any planning package to cover a real cash flow situation??

Cheers
Alex
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Thu, 2005-11-03 02:52
#9
Vladimir Liberzon
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Alex,
I wrote that it is useful to have and to manage both project cash flows in one project computer model (naturally with resources).
Best Regards,
Vladimir
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Wed, 2005-11-02 16:57
#10
Alex Wong
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Vladimir

Agreed, PM will need a cash flow statement, what I mean is part of the cash flow statement you need a resourced schedule to support monthly spend.

Hope that can clarify

Cheers

Alex
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Wed, 2005-11-02 00:41
#11
Vladimir Liberzon
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Alex,
still it is useful to have both cash flows and see both - earned and paid cash, who owes to whom, etc., isn’t it? If there are financial restrictions then it is necessary to calculate project schedule with these restrictions taken into consideration (financial leveling).
Regards,
Vladimir
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Tue, 2005-11-01 18:57
#12
Alex Wong
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Mario

Yes, in an accounting point of view, accural accounting is different to cash accounting. If what you refer to is cash accounting and I believe 99.99% of private sector is already dumping cash accounting system because it cannot give you a clear view of the actual financial situation of a company and if the company is a public listed share holding company then it is a must to use accural accounting.

The reason that project manager needs the financial information forecast and the use of a schedule is because it need its true financial not cash on hand. In addition he also need a cash flow statment to see it credit situation (if the project is a cash minus project). In a project schedule it can give a accurate forecast on upcoming events to give a good picture of how the cash situation of the project. Yes to do a proper cash flow you need opening balance and expenses incurred from the accounting system. To do a cash flow forecast for a project manage, he/she need a longer view. Ie accurate forecast up to the end of the project where it cannot be produce without a costed and resourced schedule.

So the schedule play an important role in preparing a monthly cash flow

HTH

Alex
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Mon, 2005-10-31 04:44
#13
Mario Sanvitale
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Alex, what you are doing is much more akin to an accruals account. For instance, if you are cost loading the resource you are recognising the expense at the point of incurring the accrual - you don’t actually pay the resource on the day they do the work (I imagine, anyway!). A cash flow recognises the actual point at which monies are spent and received, not when they are accrued. That is why I was confused with your request, and why I wondered how you would do it in any planning tool. Hope that clears up my query.
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Sun, 2005-10-30 17:36
#14
Alex Wong
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Mario

A cash flow to my understanding is

Opening balance - Payable + receiviable = Next Month Opening

To generate a cash flow simulation

You will have your project cost layout month by month with a resourced schedule that have cost loaded

In addition you will also have your payment milestone where you can load it with incoming cash

That way the project manager can see how the cash in and out of the project.

The only different to a accountand cash flow is they may have the credit period apply to the equation where all transaction is not a instant. However, an accountant cash flow may not have the concurrent project situation where the project schedule might have. ie a milestone is know to move six months, more work will be schedule than the original plan... all these updated information is only available in a schedule.

Cheers

Alex
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Thu, 2005-10-27 04:18
#15
Mario Sanvitale
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How will these solutions generate cash flow? They may generate some kind of accruals based project profit and loss account, but that is far removed from any cash flow report.
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Wed, 2005-10-26 20:24
#16
Zhang Haixiang
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Hi,
export to Excel can give your more flexibility
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Wed, 2005-10-26 19:59
#17
Alex Wong
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If you have a resourced schedule with breakdown of the cost and unit and update it monthly then it is easy, you can export your P3 file to generate a monthly cash flow.
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Wed, 2005-10-26 06:24
#18
Mario Sanvitale
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I think it would be very difficult unless you have exactly the same payment terms for all your suppliers and customers.

I suppose you could use some kind of coding for the different terms and then produce a custom report . . .
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