Do You Have an Adequate Cash Reserve?

09/30/2005

Do You Have an Adequate Cash Reserve?

The greatest test of courage on the earth is to bear defeat without losing heart.
R. G. Ingersoll

In their Exchange article, “Five Fundamentals of Financial Health,” (Exchange, January 2003) Mary Brower and Theresa Sull offer these suggestions on maintaining cash reserves to protect your program:

“One component of every sound budget plan is including some savings for contingencies. A cash reserve can carry a child care program through the inevitable fluctuations in income. A cash reserve may also be needed for unexpected expenses, like new playground surfacing, another child-sized sink, or repair to a weather-damaged roof.

”Experts recommend having enough cash to cover three months of the center's expenses. But administrators can begin to build this reserve slowly. Including in their annual budget as little as $100 savings per month can start a center down the road to financial health.”

To read the entire “Five Fundamentals…” article, CLICK HERE!

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