An annual budget is a forecasted plan for how much money you’ll bring in in the next year. Where that money will come from and how it will spent, invested or used. Your cash flow forecast reflects up-to-date changes. And tells you if you’re bringing in enough money to cover what you’re spending. It calculates your receipts against your payments and indicates if you’re likely to run out of money or whether you’ll have a surplus in the future.

 Understanding these report is important because it helps you prevent accumulating expenses that might risk your solvency position. There are three parts to a cash flow forecast. Operating activities, which are your day-to-day expenses and income. Investing activities, which show information about things like the purchase of equipment, property, and investments. And financing activities, which show details of how you’re repaying your loans and debt.

 Your income and expenditure statement is also known as your profit-loss statement or statement of financial performance. It tells you exactly how much income has been received over a set period. It also shows you how that income has been distributed against the expenses required to run your service. Your balance sheet is a statement of your financial position at a particular point in time. It details what you own in assets and what liabilities you owe, and the worth of your service, also called equity.

Your treasurer’s report shouldn’t need a great deal of interpretation. You should be able to look at the report and the notes to the financial reports and be able to understand the impacts and trends. It’s important to know the report should not just be transactional, telling you what happened in the past. The report should also focus on analysing how these transactions impact decision making and provide recommendations on what your committee needs to consider moving forward.

One great tool to help reporting is a dashboard report. It helps you track key trends in areas you want to monitor. For example, if you want to track weeks of working capital, currently it might be eight weeks. You can compare that to the same period last year. This shows you’re doing better than last year, but you still have some work to do to achieve this year’s goal. The dashboard report is a good summary report that can use graphs, trend diagrams, and pie charts as well as tables.