For many years, cash flow was viewed primarily as a financial responsibility for construction and A&E firms.
As long as collections remained steady, vendors were paid on time, and projects remained profitable, many leadership teams viewed cash flow as an outcome rather than a strategic focus.
Today, that perspective is changing.
According to Grassi’s 2026 Construction & Architecture & Engineering Survey, managing cash flow is a top priority for 57% of firms. At the same time, cash flow forecasting remains a challenge for about 40% of firms, and only 25% report being very satisfied with the financial and operational information they rely on to run their business.
Taken together, those findings reveal a broader issue. Construction and A&E leaders understand the importance of cash flow, yet many make decisions without the visibility needed to manage it proactively.
The challenge is no longer simply generating cash. It is about building the operational and financial insight needed to anticipate what comes next.
Cash Flow Is Now a Leadership Issue
The survey findings suggest that cash flow concerns are not driven solely by economic uncertainty. They are increasingly tied to how effectively firms integrate financial information into operational decision-making.
Most firms continue to face persistent pressure from rising labor costs, cost escalation, and margin compression. At the same time, project timing, billing cycles, and collection delays can create significant fluctuations in working capital requirements.
In that environment, cash flow becomes more than a financial metric. It measures how effectively leaders understand what is happening across the business.
The firms best positioned to manage volatility are often those that can identify potential issues before they affect liquidity, rather than after the fact.
Why Forecasting Confidence Remains Low
Effective forecasting is intended to create visibility. Yet for many firms, forecasting remains difficult to trust.
The survey shows that forecasting practices vary significantly across the industry. General Contractors and A&E firms tend to have more established forecasting processes, whereas Subcontractors report less consistency and significantly greater skepticism about forecasting’s reliability. Notably, 29% of Subcontractors believe the business environment is too unpredictable to rely on forecasting altogether.
Project schedules shift. Costs change. Payment timing fluctuates. Market conditions evolve. Forecasts made at the beginning of the year can quickly become outdated and need to be updated for real-time conditions. However, while it is not the primary obstacle, how do we forecast for uncertainty in a changing build environment?
More often than not, forecasting fails because the underlying information is incomplete, delayed, or disconnected from actual project activity. When financial reporting, project data, and operational decision-making operate independently, forecasting loses credibility.
The result is a reactive management environment in which important decisions are based on what already happened rather than on what is likely to happen next.
The Connection Between Job Costing and Cash Flow
Cash flow challenges seldom exist in isolation for construction and A&E firms.
The survey identifies job costing accuracy as the top reporting challenge for both General Contractors and Subcontractors. Cash flow forecasting remains a significant challenge across all segments. These findings are closely related.
When firms cannot accurately assess project costs in real time, they struggle to understand current profitability. Without confidence in project profitability, future cash flow projections become less reliable.
Leaders may not recognize margin erosion until it has already begun to affect working capital. Pricing decisions become more difficult, resource allocation less precise, and forecasts less accurate.
In many organizations, cash flow issues arise long after the underlying operational issues first appear. This is why some of the most important cash flow conversations do not take place within the finance department. They occur at the intersection of project management, operations, and finance.
Visibility Remains a Challenge
Perhaps the most revealing finding in the survey is that only 25% of firms are very satisfied with the financial and operational information they rely on to manage their businesses. Meanwhile, about 60% review financial results monthly.
For many firms, that reporting cadence may not match the pace of project activity. Construction projects evolve daily. Labor productivity shifts weekly. Costs fluctuate continuously. Yet financial visibility often arrives weeks later.
The disconnect creates a situation in which leaders attempt to manage real-time risks using historical information.
When visibility lags behind operations, potential cash flow issues are identified later, corrective actions become more difficult, and short-term solutions often supplant long-term planning.
What Leading Firms Are Doing Differently
The survey suggests that the firms making the most progress are not necessarily facing fewer challenges. Instead, they are building stronger connections between operational performance and financial decision-making.
These organizations increasingly view forecasting as an ongoing management process rather than an annual budgeting exercise.
They connect forecasts to backlog, work-in-progress schedules, project activity, and operational performance. They place greater emphasis on accurate job costing, more frequent reporting, and better integration between project management systems and accounting platforms. Most importantly, they use financial information to guide decisions rather than report results.
The objective is not to predict the future perfectly. It is to create enough visibility to respond earlier and make better-informed decisions.
Planning for What’s Ahead
Cash flow is often discussed as a financial outcome; however, it reflects how effectively construction and A&E firms integrate their operational, financial, and strategic decisions.
The survey findings reinforce this. Cash flow management is among the industry’s top priorities. Forecasting remains a challenge, and confidence in business data remains limited.
The firms making the most progress are not just focused on collections, financing, or cost reduction. They are strengthening forecasting disciplines, improving visibility into project performance, and aligning operations and finance more tightly.
As market conditions continue to evolve, that visibility may become one of the most important competitive advantages a firm can develop.
If your organization is evaluating ways to improve cash flow visibility, enhance forecasting accuracy, or better align financial and operational decision-making, connect with a Grassi advisor to discuss strategies that support stronger performance and long-term growth.
