Monthly Cash Flow Template
A cash flow projection is one of the most important tools in the nonprofit financial management toolkit. This tool is like a budget for your bank account, projecting when deposits and withdrawals will be made. In fact, most of us naturally have something like this in place to manage our personal finances as well. The cash flow projection is especially helpful for nonprofits using accrual-based accounting, since they are recording financial promises made before the cash that backs those promises moves from one bank account to another. The cash flow projection is an estimate of when those cash transactions will clear. This is critical information for all financial managers to have so that they can manage the timing of payments and ensure the organization does not over promise its resources.
This template has columns for each month of a given fiscal year and rows for each line item in an organization’s budget. The line items should match the budget and accounting system’s chart of accounts exactly. Additionally, the cash flow template should include any non-operating financing activities recognized on the Balance Sheet rather than the Income Statement. For example, if an organization draws down a line of credit, additional cash will be recognized in the cash flow template when the loaned money is deposited into the organization’s bank account. As the line of credit is paid off, the organization’s cash balance on the cash flow projection (and in the bank account) will decrease.
Finally, if your organization is experiencing a cash crunch you can easily convert this into a weekly template. Just change the column headers to the relevant weeks, and add more columns to the right. This will allow a more nuanced view of exactly which days or weeks may experience the most severe cash pressures, and exactly how long you have to identify a solution.
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