Key Principles of Cash-Flow Management

Strong cash flow management ensures your organization remains stable while you spend according to program needs rather than payment schedules.

Understand Your Cash Position

• Track beginning cash, expected inflows (grants disbursement schedule), and projected outflows (program costs). This is often utilized with the monthly budget and actuals comparison with the balance of cash in the bank.

• We suggest that while creating budgets for the coming grant cycle, consider reviewing prior years to identify months with anticipated shortfalls so you can plan accordingly. This proactive forward-thinking review will help identify when cash flow issues could potentially arise.

Use the Funds You Currently Have

• You do not need to match spending exactly to disbursement dates of the grant. The BCYF grant is considered restricted grant revenue, therefore you may only spend on eligible activities. This is an accepted practice as long as the spending aligns with the approved budget, Allowable Costs Reference Guide, and project timeline, even if disbursement schedules lag behind the actual costs.

• Therefore, we encourage grantees to align spending to program needs (within the grant period and budget) and not disbursement timing. Program activities should drive the budget and spending schedule—not the grant payment schedule.

Build and Maintain a Cash Reserve

Industry standard aims for 3-6 months of operating cash to always be held at the ready, when possible. Therefore, if a gap between expense and funding occurs, we encourage organizations to use reserves strategically to cover timing delays in grant payments. Then, once the grant has been paid, ensure that reserves are replenished once grant disbursements are received.