Cash Flow

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 Cash Flow module lets you 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.

If you do not select a distribution profile, then the system uses the default distribution profile, when you refresh the curve. If you remove the default distribution profile during a CSV curve setup for import, then the system uses the default distribution profile that was selected in the curve properties.

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, and so on).

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.