A lot of organisations wind back their operations during December leading up to the Christmas, the New Year’s break as well as the first couple of weeks in January.  As a result, the level of cash flow from the payment of your debtors, the receipt of income from donations, fees or grants may significantly decrease over this time.  As such, as the treasurer it is important to check that the level of cash flow over this period will be sufficient to maintain your operations.

The following provides a simple but effective checklist to help manage your cash flow at the start of the year:

• If you receive grants check when the next payment will be received?  Some government departments that usually remit funds at the start of the month may not do this in the first week of January.
• If you receive fees such as for memberships, annual subscriptions or enrolment fess at the start of the year when are likely to be received?
• Review your debtors list to ascertain how much is outstanding and when payment should be received.  Even though your debtors may need to be paid on 14 or 30 days terms this may not occur if the other organisation has closed down over this period of time.
• Check your creditors list to ascertain what accounts your organisation needs to pay.  This not only relates to outstanding invoices but could apply to payroll payments, remittances to the taxation office such as for GST, rent as well as loan repayments.

Ideally, by reviewing each one of these points should provide you with an overall assessment of how your cash flow will be at the start of the year.  You also may need to take action that may include getting on the phone and following up the outstanding debtors and asking for payment to be made.  Alternatively, if you do have a cash flow issue you may need to ask for extra time from some of your creditors to make your payment.

The other important issue this highlight is the need to always actively monitor your cash flow.  You don’t need to wait until the end of the year to do this and whether you are a treasurer or committee of management member this should form part of your regular review throughout the year.