A Cash Flow Optimization Model for Aligning Vendor Payments and Capital Commitments in Energy Projects

• Author(s): Ebehiremen Faith Iziduh ; Olawale Olasoji ; Oluwatobi Opeyemi Adeyelu
• Paper ID: 1709383
• Page: 403-411
• Published Date: 30-04-2020
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 3 Issue 10 April-2020

Abstract

Effective cash flow management is critical to the success of capital-intensive energy projects, where the alignment of vendor payments with capital commitments significantly influences liquidity and overall financial stability. This paper presents a comprehensive cash flow optimization model designed to synchronize short-term payment obligations with long-term capital expenditure schedules, addressing inherent timing mismatches and liquidity risks. The model integrates core treasury management principles with project-specific financial dynamics, incorporating key variables such as payment terms, cash inflows, and capital budgeting constraints. By employing a multi-stage optimization approach with adaptive feedback mechanisms, it enables proactive financial planning, minimizing funding gaps and reducing reliance on costly emergency financing. The study further discusses practical constraints faced by treasury teams in the energy sector and demonstrates how the model supports improved liquidity forecasting and risk mitigation. Future research directions include incorporating advanced forecasting techniques and expanding the model for multi-project financial management. This framework contributes both theoretically and practically to enhancing cash flow discipline in complex energy investments.

Keywords

Cash Flow Optimization, Vendor Payment Scheduling, Capital Commitments, Energy Project Finance, Liquidity Management, Treasury Risk Mitigation

Citations

IRE Journals:
Ebehiremen Faith Iziduh , Olawale Olasoji , Oluwatobi Opeyemi Adeyelu "A Cash Flow Optimization Model for Aligning Vendor Payments and Capital Commitments in Energy Projects" Iconic Research And Engineering Journals Volume 3 Issue 10 2020 Page 403-411

IEEE:
Ebehiremen Faith Iziduh , Olawale Olasoji , Oluwatobi Opeyemi Adeyelu "A Cash Flow Optimization Model for Aligning Vendor Payments and Capital Commitments in Energy Projects" Iconic Research And Engineering Journals, 3(10)