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# Cash flow forecast

The first step to ensure that your programme has sufficient funds is to prepare a cash flow forecast (sometimes also called a cash budget).

A cash flow forecasts the money coming into and going out of an organisation over time. It allows you to forecast periods when you might have too little or too much cash available.

As Programme Manager your priority will be to make sure that you have enough funds locally for local expenditure. The worked example shows how a cash flow forecast can be used to calculate the transfers required each month from your organisation for local expenditure.

Key points to consider:

- For expenditure - there are generally major start-up and capital costs at the beginning of the programme.
- For income - there may be delays not only in securing funding but also in transferring money to your programme.
- Large sums in cash may be security risk and if held in the local currency, there is the additional risk of exchange rate losses. These need to be balanced against the risks of running out of money and therefore stopping your programme.