When There’s No Money Left in the Bank

This wonderful, pragmatic post by Joan Garry says it all.  What to do when you owe more than you have, when you go to the cupboard and it’s bare, when you can’t even make payroll.

Accounting figures heavily in the list, of course.  Having a clear picture of the numbers.  Being honest with staff and the Board.  Doing projections and cash flow reports.  It’s all bread and butter to accountants.

But there’s something that accountants often miss.  I don’t know how often I have sat in annual meetings and watched an accountant talk about the organization being at risk of having a loss, only to see the message ignored.

What we have here is a failure to communicate.

All the years I spent learning how to create a financial statement and not a single hour spent on how to communicate the message.  That’s our Achille’s heel as accountants.

If you are a Treasurer or Accountant for a charity and they are in any danger of having a cash flow crisis, here is your mission (should you decide to accept it):  apply Joan’s action list NOW.  Don’t wait for the worst to happen.

  1. 12 month cash flow forecast showing when the crunch can happen
  2. Broaden the message – this isn’t just a Finance or Fundraising issue
  3. Communication – at least every month and more when news happens
  4. Plans of attack – covering each area, including program spending
  5. Finance Committee / Board support
  6. Be sure of your facts and give your message confidently.  If that isn’t you, if getting up in front of a meeting isn’t your thing, then delegate this part.  You can be the behind the scenes support just as effectively as being the spokesperson.

Being a good communicator is difficult at the best of times, but even more challenging in times of crisis.  If you have to be the person at the podium, make sure you rehearse your message.  Practice giving it to your family.  Repeat it until it no longer feels uncomfortable.

Just remember that the message is that the people we help need support, not we need money.

2 Comments on “When There’s No Money Left in the Bank

  1. The most important step in my opinion is the 12 month cash flow forecast showing when the crunch can happen. It’s always good to be well prepared..

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