Find a Cash Shortfall Before Month End

The Practical Check

A forecast follows when cash is expected to arrive and leave. A positive final balance can hide an earlier shortfall. Work through each period in order, carry its closing balance forward, and ask a finance owner how any shortfall will be handled. An expected receipt is an assumption until its timing is confirmed. This example is arithmetic practice, not an approval to spend or borrow.

Your Starting Facts

Fictional example, one currency, unrestricted cash only: opening cash 800. Month 1 receipts 0 and payments 1,000. Month 2 receipts 1,200 and payments 600. The Month 2 receipt date is an assumption to confirm. No overdraft or borrowing has been approved.

Worked Example

Month 1: 800 + 0 - 1,000 = -200. Month 2: -200 + 1,200 - 600 = 400. The positive Month 2 balance does not fund the Month 1 payment date. The -200 is a forecast warning, not evidence that a bank will permit an overdraft.

Try the Judgment Exercise

What needs action before the Month 1 payments?

Nothing, because the final balance is 400.Ask the finance owner to resolve the Month 1 shortfall and confirm receipt timing.Replace the zero receipt with a blank cell.

Use the Checking Prompt

Copy this prompt into your own AI tool with non-sensitive inputs, then check the answer yourself. OpenAid does not send this text to an AI service.

Using the cash-flow inputs below, calculate each period as opening cash + receipts - payments, then carry the closing balance into the next period. Distinguish missing inputs from numeric zero. List every period with a negative closing balance and every unconfirmed receipt assumption. Keep restricted cash separate. Do not recommend borrowing, invent receipt dates or assume spending approval. Show the arithmetic so a finance owner can check it.

INPUTS:
[paste a non-sensitive forecast in one currency]

Continue With the Resource

NGO Cash-Flow Forecast Template

Fictional examples for practice. Completing an exercise does not certify competence.

From OpenAid · www.opendevelopmentaid.org/learn/learn-read-cash-shortfall · free to use with credit