The importance of cash-flow forecasting
You may have attended a recent seminar where Ian Desbrow Viewpoint’s Managing Director, ANZ uncovered some harsh truths which for too long the construction sector as a whole has ignored. If you were not, in his speech he focused on the fact that far too many businesses involved in construction – be they the asset owner, head or sub-contractors – lack integrated project systems and /or skills which allow them to stay on top of their financial situation.
Through his presentation, Mr Desbrow drew the audience’s attention to several realities plaguing the industry, and which will continue to until there is a change in the way companies run their operations. In particular, he drew attention to:
• The fact that in the last decade the construction industry has accounted for between one-fifth and one-quarter of all insolvencies in Australia, a disproportionately high statistic relative to its share of national output;
• The need to improve education for the next generation entering the construction workforce, highlighting the increased need for greater emphasis on management and financial knowledge;
• Examples where inadequate financial control had led to the insolvency of companies that appeared on the surface to be thriving;
• The need for companies to embrace change, with a focus on improving management systems, streamlining reporting processes and upskilling their workforces.
In his closing remarks, Mr Desbrow emphasised that whilst implementing and then using technology well will be “a strong risk mitigator and aid to project success, we must note it is not a panacea, but rather is a ‘framework’ for a business to learn from so it can grow and improve. Technology is just one part of a puzzle the industry requires education and adoption of stronger fiscal management in all businesses which in turn will go a long way to alleviating a huge strain on the country, the industry and ripple effect to everyday Australians.”
If you would like more information on the role of technology and an overview of why project systems and accounting platforms must be intrinsically linked, you can read the whitepaper.
Our thanks to Viewpoint for this information.
Have a good weekend ahead everyone..