Cash Flow Forecasting: Developing the Right Approach for Your Entity

Governments should have a solid understanding of the movement of funds in and out of the organization. Cash flow analyses should be conducted regularly to estimate expected inflows and required disbursements during a given period to ensure sufficient liquidity. These can include tax and fee receipts, investment income, grants, or other revenues; and vendor payments and payroll expenses. Such an analysis is intended to measure and assess governments’ abilities to meet financial needs and prevent the need for short-term borrowing, tapping into an entity’s reserve fund and limiting idle cash balances.

Governments should create a strategy for cash flow forecasting and analysis. This course will provide an overview of cash flow forecasting activities, discuss details of what is included in a cash flow analysis and how to conduct one, and outline the type of information governments should be tracking in order to conduct an accurate analysis.