Cash Flow Forecasting

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Cash Flow Forecasting

Governments conduct cash forecasts to ensure sufficient operating liquidity by estimating the available cash deposits, expected inflows, and required disbursements during a given period. Common inflows include tax receipts, bond proceeds, utility payments received, grant revenue, other revenue from fees and penalties, and maturities and interest revenue from investment securities.   Outflows represent anticipated payments such as debt service, employee payroll and benefits, payments to vendors for goods and services, and purchase/roll over of investment securities. Governments should also consider and include non-repetitive receipts and payments such as proceeds from bond issuance, capital expenditures or expected legal settlements, using reasonable assumptions.

Using Cash Forecasts for Treasury and Operations Liquidity

GFOA recommends that governments perform ongoing cash forecasting to ensure that they have sufficient cash liquidity to meet disbursement requirements and limit idle cash.

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Microsoft Excel Templates

Cash Flow Models

Simple Cash Flow Model

Simplified blank model for download (Excel format)

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Cash Flow Model

Blank model for download (Excel format)

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Cash Flow Model (Anoka County)

Cash flow model with data from Anoka County

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Cash Flow Model (Midpen Open Space District)

Cash flow model with data from Midpeninsula Open Space Regional Distrct

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GFOA Materials Library

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Managing Cash Flow in a Crisis

How to Quickly Build a Working Cash Flow Model

Cash Flow Forecasting and Fiscal First Aid

Revenue inflows may be affected for several reasons, including tax and fee extensions and holidays implemented by state and local governments. Governments should develop and execute cash flow scenarios that illustrate the impact of policy decisions and circumstances that impact inflows to the entity. Maintaining liquidity for your entity is key and knowing if or when there may be a shortfall will help you develop the right solutions. Governments should also work closely with their elected bodies to communicate changes in your entity’s collection policies that could have a financial impact (e.g., if late fees will be waived for government taxes and fees; if payment delays or extensions should be provided to taxpayers). For any policy changes that impact timing of payments, collection rates, or payment amounts, treasury officials should be part of the decision making process.

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