In Unifier, the term "cash flow" refers to:
- The movement of money in or out of a project (or business) during a specific time period.
- The movement of money in or out of a company in regard to a specific existing project, or shell, during a specific time period.
- The distribution of cost over time.
In the context of capital projects, cash flow is the estimating of future spends to be incurred on a project, based on current Actuals (or "spends).
The term cash flow is synonymous with cash flow forecasting, Actuals (or "spends") forecasting, and time-phasing of budget, which all refer to the availability of proper funding in each future period (month, quarter, or year).
Cash flow management includes the following steps:
- Establishing a baseline spending plan: Baseline
- Tracking actual costs: Actuals
- Calculating future expenditures based on project schedules: Forecast
Note: Cash flow forecasting is used to ensure that cash is available when payments are due.
The Unifier Cash Flow module enables you to create the following curves and compare them on one cash flow worksheet:
- Baseline
- Forecast
- Actual (or Spends)
- Portfolio Budget
- Derived
- Custom curves
You can create data source, distribution profiles, and cash flow curve templates to simplify the creation of cash flow in multiple projects and shells.
Administrators can set up Base Commit business processes to automatically create cash flow curves for the commitment record at a particular workflow step, or for non-workflow business processes, when the record is complete.
The following defines the three most common, and important, standard cash flow types:
- Baseline
- Actuals (or Spends)
- Forecast
Baseline
The Baseline is defined as:
- The time-phased distribution of the project budget over the project duration.
- The project budget distributed over the duration of the project, indicating how the budget might be spent.
A project can have multiple Baselines (original, revised, etc.).
Actuals (Spends)
The Actuals (Spends) is defined as:
- The spends that have actually been incurred (approved invoices, or in some cases, accruals).
Note: Spends is defined as periodic outlay of money, tracked per CBS.
- The project spending which includes actual invoices received for each period.
The Actuals (Spends) can be compared to baseline budget to maintain budgetary control.
Forecast
The Forecast is defined as:
- The time-phased distribution of the project forecast, from the latest Actuals (Spends).
- The expected spends for the future.
The start point of a Forecast curve is the end of the latest Actuals (Spends), and the end point is the total forecast.
You can use cash flow forecasting to ensure that cash is available when payments are due.
Forecast is updated as new actuals are incurred.
You can create cash flow at multiple levels in a project to:
- Track cash flow for the entire project or shell: Project/Shell
- Track the costs associated with summary CBS code: Summary CBS
- Track cash flow at the CBS code level, across all or specific CBS code: CBS
- Track cash flow data for an entire commit record, including Base Commit, Change Commit, and related invoice: Commitment
Base Commit and Change Commit are Commitments BPs which are sub-types of Cost-type BP.