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NYS Comptroller

THOMAS P. DiNAPOLI

The Academy for New York State's Local Officials

Cash Management: A Tutorial for Local Governments and School Districts

Module 4: Monitoring Cash Balances

Selecting the Cash Flow Analysis Period

Initially, developing a cash flow analysis will take time, as you seek to identify historical trends to use in your estimates. Once you have developed this analysis, updating and maintaining it becomes easy. The good thing is that you can make the analysis as simple or complex as you want.

A cash flow analysis may be done annually, monthly, weekly, or daily, or developed for particular capital projects.

  • Annually - estimates monthly cash positions for the year, determines the cash available for investments of more than 30 days, and provides a useful monthly overview (but lacks detail for operational purposes).
  • Monthly - estimates weekly cash positions for the month, determines cash available for investments of less than 30 days, and monitors the accuracy of annual forecasts.
  • Weekly - estimates daily cash position for the week, determines the cash available for investments of less than seven days, and monitors the accuracy of monthly forecasts.
  • Daily - predicts the available fund balances that can be invested or disbursed based on actual bank balances.
  • Project-based - provides monthly data on status of capital projects, helps fine tune monthly and weekly forecasts; and and may require information from contractors or in-house project managers.

Select the cash flow analysis period that meets your needs. Only you can decide what your objectives are and how to achieve them. Certainly, an important objective is to enhance your potential investment earnings by identifying excess balances available for investment. A cash flow analysis will help give you that information.

To begin, decide which cash flow format will sufficiently meet your needs. This determination should be based on the resources available to you such as staff, time, and computer/technology, as well as the amount and timing of available excess balances.

Also keep in mind that using an automated financial system can help in monitoring your cash balances. An automated call-in system or software program will provide daily tracking of available cash balances, check clearings and collections of items deposited in checking accounts. Please contact your local bank representative to obtain information on what systems or programs are available to you.

  Next: Gather Needed Information