For government and nonprofit entities managing tight budgets, restricted funds, or grant timelines, a cash flow spreadsheet is an essential component of strong cash management.
A cash flow spreadsheet is a structured document, often created in Excel or Google Sheets, that lays out:
- Cash inflows: Funds expected to be received (ex., tax revenues, grants, utility payments, donations)
- Cash outflows: Payments the organization expects to make (ex., payroll, debt service, vendor payments, capital expenses)
- Net cash position: The difference between inflows and outflows, typically shown by time period
It provides visibility into liquidity and helps finance teams plan for potential shortfalls or opportunities to invest excess cash.
How to Do a Cash Flow Spreadsheet
Here’s a step-by-step guide to building a basic cash flow spreadsheet:
1. Choose a Timeframe
Decide how far ahead you want to forecast, some common formats include:
- 4-week rolling
- 13-week forecast (popular in treasury)
- Monthly or quarterly views for higher-level planning
2. List Beginning Cash Balance
Start with the amount of cash on hand at the beginning of the period. This becomes the foundation for calculating the running balance.
3. Add Expected Inflows
Include all sources of incoming funds by date or week:
- Property taxes
- Utility revenues
- Federal/state grant distributions
- Service fees
- Donations
4. Add Expected Outflows
List expected payments, categorized by type and timing:
- Payroll
- Operating expenses
- Debt payments
- Capital expenditures
5. Calculate Net Cash Flow
For each period, subtract total outflows from total inflows.
6. Track Running Cash Balance
For each period, subtract total outflows from total inflows.
Best Practices:
- Update frequently to keep the spreadsheet current with actuals vs. forecasts.
- Use conservative estimates to avoid overestimating inflows or underestimating expenses.
- Break out restricted vs. unrestricted funds to prevent misusing grant dollars or bond proceeds.
- Use conditional formatting to highlight negative cash balances and spot risks early.
- Layer in scenarios by adding columns for best case, expected case, and worst case to stress test your forecast.
What’s important here?
A cash flow spreadsheet helps track the movement of money in and out of your organization, giving you a clearer picture of your short-term liquidity. By listing expected inflows (like grants or tax revenue) and outflows (such as payroll or debt service), you can anticipate cash shortages or surpluses and make more informed financial decisions.
For government and nonprofit teams, this tool is critical for planning ahead, ensuring timely payments, and avoiding unnecessary borrowing.