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If you are interested in setting up your own business or charity, you will have been told many times that cash is the heart of any venture you get involved with; meaning cash budgeting is essential. Although some charities do have sales many smaller ones do not; however, they still have to manage the cashflow very carefully because they have a duty of care to the public who are donating their money and to the people or causes they have framed their strategic goals around.

Working as a Treasurer for a children’s charity, the Friends of Shelby Newstead (FOSN), I have learnt that balancing the cash is vital because you have many things happen at the same time but with cashflow consequences at different times of the year. You have to fund as many good causes as you can, so in our case we provide the help that children and their families need while going through very difficult times (usually they are seriously ill) or helping them to find alternative ways to deal with illnesses or disabilities they have. In addition, you have to ensure you have the financial resources to generate the next set of funds. Cash for most charities will come from several big events throughout the year. Therefore it is essential to run a set of accounts that includes accruals and prepayments to communicate clearly with the trustees, so they do not commit to good causes that they can not afford. As with all business, a charity must have a risk management strategy, and this includes having enough funds available to cover unforeseen circumstances. Fortunately, this has not been an issue for FOSN but you must always be prepared for such a situation.