Lesson 4 – Managing Cash Flow

One of the biggest challenges for nonprofits is managing cash flow. The purpose of managing your cash flow is to make sure you have enough cash to pay current and future bills and obligations.

Nonprofits can manage cash flow by reviewing a cash flow statement and cash flow projection. The cash flow statement includes total cash received minus cash spent. Cash management looks at actual cash transactions.

Nonprofits must file a financial statement called Statement of Cash Flow. The Cash Flow statement includes total cash received minus total cash spent. This statement reports the change in cash and cash equivalents in three sections:

  • Net cash from operating activities
  • Net cash from investing activities
  • Net cash from financing activities