Cash flow management is a vital process for the efficient and effective management of operations and activities in construction firms. Researchers have been involved in developing the cash flow management models for the use of construction firms. The research presented in this thesis address this vital process - cash flow management in construction firms. It proposes a two-step a stochastic cash flow simulation model to manage interim and final payment delays in construction projects. The first step of the proposed model is pattern identification process - identifying the payment patterns of the owner. The second step is financial risk evaluation process based on Cash flow at Risk (CaFR). Three construction projects are used to illustrate the implementation and utility of the proposed stochastic cash flow model. The results of the proposed stochastic simulation model suggest that payment delays in construction projects is common and payment delays not only increase the operating capital requirements of construction firms but also bring significant financial burden to the construction firms. The proposed model enables construction business executives/practitioner to evaluate the financial risks due to the payment delays. Key Words: Cash Flow, Cash Flow Management, Cash Flow Analysis, Payment Delay, Cash Flow at Risk