Why is managing cash flow important?
Understanding and planning for the timing of the flow of cash into and out of your organization is important to assure you have the cash on hand needed to pay bills as they come due. For example, if you receive your fuel order once a year by barge and the cost is $50,000.00 delivered to your community (FOB), you need to set funds aside and make sure they are available for this use at the time the barge delivers fuel. Planning ahead for this through the budgeting process is especially important, since you must have cash on hand to pay the bill when it is due and to avoid problems with your suppliers as well as possible late payment penalties. How does this relate to grants management? Grants are usually cost reimbursable. This means you first need to have money available to begin the project and handle expenses until grant reports are submitted and reimbursed. Planning ahead is important to assure you have a supply of cash on hand to cover the up front costs of the grants you are runnin
