Modelling the interactions between project payment systems, financial management strategies, and construction companies performance

Abstract

This research examined the influence of the dependent variables of project payment systems and financial management strategies on construction organisation performance, with particular focus on the mediating effect of those strategies. This study adopted a positivist research methodology. It used a quantitative method of data collection in order to realise the development of a standard model, to help identify which project payment systems and financial management strategies could impact construction organisation performance. Findings from the data analysis revealed that financial management strategies played a significant role in ensuring a positive relationship between clients' payment systems and the construction company's financial performance. This study concludes that the financial management strategies in used by the construction organisations enhance their cash flow, monitor underspending or overspending against project cost targets, ensure accurate financial accounts. It is therefore recommended that new payment system should be formulated to integrate the needs of clients and contractors.