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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

Elements of a Good Cash Flow Analysis

In developing your cash flow analysis, keep these factors in mind:

  • Communication: Open communication with all your major department heads, financial personnel, and governing board will help you to avoid unplanned and unforeseen events.
  • Simplicity: Keep the analysis as simple and practical as your needs require.
  • Conservatism: Keep your estimates reasonable. Overestimated revenues and underestimated expenditures can lead to unwise investment planning.
  • Comparison: Comparing your estimates with actual results of operations can help improve the accuracy of your cash flow analysis and create accurate databases for future forecasts.
  • Variances: Identify and explain any variances between your estimates and actual results of operations. This will affect short-term investment or borrowing strategies. In addition, understanding these variances can help you improve your forecasting techniques.
  • Documentation: Retain all the documentation used in preparing the cash flow analysis. This will help in preparing future forecasts.

  Next: Module 4 Recap