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Contractors’ perceptions of the effects of cash flow on construction projects

Authors :
David J. Edwards
Abimbola Windapo
Emmanuel Dele Omopariola
Wellington Thwala
Source :
Journal of Engineering, Design and Technology. 18:308-325
Publication Year :
2019
Publisher :
Emerald, 2019.

Abstract

PurposeThis paper aims to evaluate Nigerian contractors’ perceptions regarding the effects of positive and negative cash flow during construction projects, with a view to establishing effective strategies for cash flow management.Design/methodology/approachA desktop-based literature review is used to develop a cross-sectional questionnaire survey which uses Likert items to elicit responses from construction professionals on: the reasons for cash flow problems; the impacts of negative and positive cash flow; and the potential solutions for improving cash flow on construction projects.FindingsThe study finds that delay in payments, difficulty in obtaining financial aid and inadequate budgetary control are the causes of cash flow problems during construction projects. Cumulatively, these issues result in project delays, reduced profit margins and in the worst scenarios, abandoned projects.Originality/valueThere has been limited research into the effects of positive and negative cash flows on construction projects in Nigeria and indeed, the wider geographical location of West Africa. This study addresses this observed dearth and consequently advances methods and solutions to deal with the problem of poor cash flow management in the Nigerian construction industry.

Details

ISSN :
17260531
Volume :
18
Database :
OpenAIRE
Journal :
Journal of Engineering, Design and Technology
Accession number :
edsair.doi...........80cad4bfcff82f3310a3116596438751
Full Text :
https://doi.org/10.1108/jedt-04-2019-0099