Contractors’ perceptions of the effects of cash flow on construction projects
Journal of Engineering, Design and Technology
ISSN: 1726-0531
Article publication date: 10 September 2019
Issue publication date: 9 March 2020
Abstract
Purpose
This 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/approach
A 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.
Findings
The 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/value
There 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.
Keywords
Citation
Omopariola, E.D., Windapo, A., Edwards, D.J. and Thwala, W.D. (2020), "Contractors’ perceptions of the effects of cash flow on construction projects", Journal of Engineering, Design and Technology, Vol. 18 No. 2, pp. 308-325. https://doi.org/10.1108/JEDT-04-2019-0099
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited