Mutti, C d N and Hughes, W P (2002) Cash flow management in construction firms. In: Greenwood, D (ed.) Proceedings of 18th Annual ARCOM Conference, 2-4 September 2002, Northumbria, UK.
Abstract
The level of insolvencies in the construction industry is high, when compared to other industry sectors. Given the management expertise and experience that is available to the construction industry, it seems strange that, according to the literature, the major causes of failure are lack of financial control and poor management. This indicates that with a good cash flow management, companies could be kept operating and financially healthy. It is possible to prevent failure. Although there are financial models that can be used to predict failure, they are based on company accounts, which have been shown to be an unreliable source of data. There are models available for cash flow management and forecasting and these could be used as a starting point for managers in rethinking their cash flow management practices. The research reported here has reached the stage of formulating researchable questions for an in-depth study including issues such as how contractors manage their cash flow, how payment practices can be managed without damaging others in the supply chain and the relationships between companies' financial structures and the payment regimes to which they are subjected.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | cash flow management; company survival; company failure; financial control |
| Index terms: | industry sector, company failure, insolvency, forecasting, cash flow management, manager, cash flow, construction firm, financial control, management expertise, company survival, construction industry |
| Subjects: | financial management, professional development, industry analysis, liability law, risk assessment, business, organization, practitioner, economic analysis, prediction and forecasting |
| Topics: | Roles and Professions, Risk Management, Information Management, Research Practice, Cost Management, Business Strategy, Legal Issues |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here