As the budget season is just getting underway, many are finding it to be a very different process this year.  This is certainly not the best timing to start budget projections given the unusual situation COVID-19 has put us all in.

Rather than having committees meet and sort through departmental requests, hires, retirements, predictable revenue patterns, etc., the process is rather taking place remotely, singularly, and with “best-guess” revenue projections that will surely be affected by this pandemic. The starting point is a stab in the dark, as sales tax, revenue sharing, and other kinds of projections are still 30 to 60 days away from being released.

Where do you even start in preparing for 2021, let alone the next quarter?

One major tool that can be a helpful guide in determining a budget cycle is the liquidity data that are at your own fingertips.

We consider liquidity data to be the science of looking at each financial transaction that passes through an organization. The patterns that liquidity data are able to capture include an entity’s past behaviors over the course of a full budget year. The greater the data, the greater the output in determining financial patterns.

In addition, liquidity data provide the ability for one to apply different potential scenarios, like how the coronavirus is affecting the community. As a result, revenue projections can be adjusted around certain assumptions, such as revenue losses and funds received by direct or indirect federal and/or state funding. Coupling this information with the actual levels an entity will require to meet day-to-day cash needs, an organization is able to use the remaining cash as a revenue-producing asset, thus having a positive impact on its budget.

Gathering liquidity data is a science and serves as a valuable tool and resource to any finance office. As an added benefit, the information is available remotely and securely.

The liquidity analysis and data provided by three+one’s cashvest® platform is the only service of its kind that’s available to public entities and higher Ed institutions nationwide. Not only can you have liquidity data provided to you directly to use in preparing a budget, it can also be used to provide specific forward forecasting that can be applied in “what-if” circumstances, while comparing any potential stresses on your operating cash levels.

Let the three+one® team help you through your budget process. There is not a specific liquidity scenario that we have not had to address, in good times or challenging ones. Consider us as part of your remote budget team to help you apply liquidity data to ensure a better outcome.