Cash Management and Cash Programming
What cash programming is
The cash program is a forward estimate of cash receipts and disbursements by month or quarter. It converts the approved budget into liquidity: when cash will come in and when obligations will be paid. It is not the budget and not the allotment; it is the treasurer's financing plan, prepared with the budget officer and accountant and approved by the mayor.
Principles
- Deposit collections intact and promptly; do not use receipts to pay expenses.
- Time disbursements to due dates, not earlier.
- Keep a buffer for unpredictable collections.
- Reconcile bank balances before projecting.
- Identify financing gaps early; borrowing requires separate legal authority.
Worked example
Beginning cash P1.2M. Projected collections: January P3.0M, February P2.2M, March P2.8M. Projected disbursements: P3.4M, P2.6M, P2.4M. January ends with P0.8M (1.2+3.0−3.4), February with P0.4M (0.8+2.2−2.6), March with P0.8M (0.4+2.8−2.4). There is no deficit, but the February buffer is thin. The treasurer should accelerate January collections, defer non-priority purchases, and not count March inflows before collection.
Traps
- Presenting the cash program as the annual budget.
- Counting receivables as cash.
- Ignoring outstanding checks and deposits in transit.
- Borrowing or using trust funds without authority.