What if the CFS shows a deficit because the clients expenditure exceeds their income?
If the client’s monthly outgoings are more than they receive in income, the following should be considered before submitting a deficit financial statement: • Explore all the avenues for maximizing the client’s income; • Discuss ways of reducing expenditure with the client where possible. The trigger figures can be used as a guide to review the client’s spending; • If the client has a valid reason for exceeding trigger figures then this should be explained in the notes accompanying the financial statement summary sheet and any letter(s) sent. Creditors will vary in how they deal with financial statements that show a deficit. Explanation notes should cover reasons for the deficit budget and what is being done to address the deficit. The explanation should include the likely timescales involved as a deficit budget is not likely to be sustainable in the long term.
