Daily Cash Report » Overview

The Purpose of Preparing a Daily Cash Report

Maintain the “Feel” of Cash Flow:

When a company is small and growing the entrepreneur can manage cash by picking up a manual check register or checking the balance on line with the bank. Somewhere around $3-5 million in sales the ability to get a “feel” of the cash flow by looking at a simple register becomes more difficult.

[box]By having a daily cash report prepared and emailed to the appropriate parties, the entrepreneur regains his “feel” of the pulse of cash flow racing through the organization.[/box]

Accountability for Accountants:

Another benefit to preparing a daily cash report is discipline. In order to generate this report on a daily basis your accounting department must be current on their tasks.

[box]Poor performance would be obvious.[/box]

Stop Crisis Management of Cash:

The last benefit is anticipation of cash needs.  A feature of your daily cash report should be to project the company’s cash needs for the coming week. This step would prevent crisis cash management. The last thing a CEO wants to hear is that on Wednesday we need cash to make Friday’s payroll!

The Daily Cash Report is used to report on the daily cash balance and to help manage cash on a weekly basis. This tool is especially useful when entering a situation where active cash management is required. This tool is used best as a tactical, active cash management tool.

[box]Knowing your daily cash position as well as your weekly cash commitments will give you added impetus to collect money and/or to generate revenues.[/box]

This tool is also helpful when used in conjunction with the 13- Week Cash Flow Report. It is helpful to think of the 13-Week Cash Flow Report as giving you the strategic big picture needs, while the Daily Cash Flow Report provides a more tactical level measure of a firm’s cash position. You can tie a week’s worth of cash receipts and cash disbursements as reported in the Daily Cash Report to the 13- Week Cash Flow Report.

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Frequency to Produce the Daily Cash Report

The Daily Cash Report is updated daily or weekly. The frequency depends on the severity of the cash crunch. If cash is so tight that you might bounce checks or run out of it then daily is appropriate. Once company we know of started preparing the report during a cash crunch and has since maintained it as a management tool for 15 years, long after any liquidity crisis.

Updated Daily:

Updated Weekly:

There is some element of planning involved insofar as weekly cash commitments are concerned. You want to get out ahead of your cash commitments. If the company is in a severe cash crunch, you may need to negotiate with vendors about partial payments.

Who Produces the Daily Cash Report?

The CFO/Controller should set up and manage the Daily Cash Report. However, it can be delegated to a staff member in accounting to keep up on a daily basis. If you have a sophisticated reporting system a large portion of the report could be automated.

What Makes Up A Daily Cash Report?

There are 3 sections to the Daily Cash Report:

Today’s Cash Position:

Weekly Cash Position:

Payables Detail:

Prepare the report the morning of each workday based on the transactions of the previous day. 

Then use the information on the report to help you manage cash for the day that you prepare it.

Note: Today’s Cash Position is really the ending cash position from yesterday.

Daily Cash Report Template:

Click to download: Daily Cash Report