The Daily Cash Report
The Daily Cash Report is used to report on the daily cash balance and to help manage cash on a weekly basis. When entering a situation where active cash management is required for your daily cash flow, this tool is especially helpful. Use the daily cash report template as a tactical, active cash management tool. 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. You can then take the information generated in the daily cash report and incorporate the information into another useful tool, the Flash Report!
Why use a daily cash report? Often CFO/Controllers when facing a cash crunch manage cash by reviewing the online bank balance. Though easy to do this number is not accurate. It does not take into consideration outstanding checks. Another symptom of a cash crunch is that accounting falls behind in processing information. By preparing this daily cash flow forecast or projection you force the accounting department to stay current with posting transactions.
Cash Flow Forecast
This tool is also helpful when used in conjunction with the Thirteen Week Cash Flow Projection. It is helpful to think of the 13-Week Cash Flow Report as giving you the strategic big picture needs. Conversely, the Daily Cash Flow Report provides a more tactical level measure of your 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.
The Daily Cash Report is updated daily and should not take more than thirty minutes to prepare. However, there is some element of planning involved insofar as weekly cash commitments are concerned. If the company is in a severe cash crunch, you may need to negotiate with vendors about partial payments.
Daily Cash Position
This purpose of this section is to give you the cash position at the start of the day as per the G/L balance. The cash position for the start of today is the same as the ending cash balance from the last business day. Hence, the report you update and start off with at the beginning of today will be on the information from the last business day. (Reminder: this report is prepared the following day of the reporting period.)
After obtaining the starting balance for the last business day, we need to capture cash inflows. The third piece of financial information you need to obtain is information on cash disbursements from the last business day.
Sum up these elements together to obtain the ending cash balance for the last business day: Reconciled Balance + Total Deposits – Total Disbursements = Cash Balance.
Incoming monies from yesterday Disbursements (Insert Date from 1 business day ago)- Payroll Fees – AP Checks – Other Disbursements = Total Disbursements
ENDING CASH BALANCE AS OF : This is also the Beginning Cash Balance for TODAY. Reconciled Balance + Total Deposits – Total Disbursements.
Weekly Cash Position
The weekly cash position gives management an estimate of how much incoming cash and cash disbursements the company expects to have for the entire week. Remember, this is an estimate only. It should be updated periodically so that the company improves on the estimate. Your company may prefer to have a separate line item for certain significant cash disbursements. As long as the overall report is kept as simple as possible, this is acceptable.
The CFO/controller will need to list the different vendor/suppliers that the company intends to pay for the week. During times of extreme cash shortage, it may be helpful to make a note of which vendor/suppliers are of high priority.
Daily Cash Report Monitor & Review
The Daily Cash Report should be monitored and reviewed on a daily basis in situations where cash management is big key part of company survival. A key part to focus on is the estimate of weekly cash deposits. Monitoring and reviewing the cash deposits will improve the accuracy of the estimates. For more ways to improve your cash flow, download the free 25 Ways to Improve Cash Flow whitepaper.
Access your Cash Flow Tuneup Execution Plan in SCFO Lab. This tool enables you to quantify the cash unlocked in your company.
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