The ₹3 Crore Cash Flow Crisis That Could Have Been Avoided

 

The ₹3 Crore Cash Flow Crisis That Could Have Been Avoided - A Project Manager's Nightmare"

Two days ago, I shared about material tracking. Yesterday, quality control. Today, let me tell you about the crisis that keeps project managers awake at night.

The Crisis: Cash flow paralysis in the middle of construction.

Last month, I consulted for a Pune developer whose ₹150 Cr project came to a complete halt. Workers unpaid for 6 weeks, suppliers refusing material delivery, bank loan EMIs pending.

The shocking part? The project was profitable on paper!

What Went Wrong:

• No real-time cash flow monitoring
• Payment collections not aligned with expenses
• Contingency funds used for "other purposes"
• No early warning system for cash crunches

The Real Cost:

• ₹3.2 Cr in idle time and penalties
• 4-month project delay
• Reputation damage worth millions
• Legal complications with buyers

My Cash Flow Formula (Used in 200+ Projects):

1. Weekly Cash Flow Reports - Know your position every 7 days
2. 30-60-90 Day Projections - Plan 3 months ahead, always
3. Collection-Expense Sync - Match payment schedules with cash needs
4. Emergency Fund Rule - 15% of project cost as untouchable reserve

The Result: Projects following my system have ZERO cash flow stoppages and complete on time.

Cash flow isn't about having money - it's about having money when you need it.

Question: Have you faced cash flow challenges in your projects? What worked for you?