I’ve attached the cash flow management policy we use at CCV.
It guides what we do when we experience a budget shortfall, and the required actions necessitated to trigger moving to the next level of seriousness.
I highly encourage that you and your team adopt one for your team, especially before you head into summer.
CCV Cash Flow Management Policy
Level 0 – Business as Usual
- Meeting budget the majority of months and expected for the entire year
Action Trigger Criteria for Moving to Level 1
- Activated after 2 consistent months
- Weekly Short-Fall = 10-15% of Expected
- Average Monthly Short-Fall ≥ $14K
- Expected Annual Short-Fall ≥ $168K
- Past-due A/P more than $3-5K
- Active until budget is met and shortfall resolved or LT changes criteria
Level 1 – Caution
- Ask leaders to reduce their budgeted expenses by 10-15%
- Re-evaluate rehiring staff that leave
- Cancel all general fund major projects
- Share budget issues with ministry and small group leaders
Action Trigger Criteria for Moving to Level 2
- Activated after 4 consistent months at the Level 1 triggers from fiscal year start, or
- Offering dropped by 20% under expected.
- Past-due A/P more than $5-7K
- Active until budget is met and deficit resolved or LT changes criteria
Level 2 – Concerned
- Freeze salary increases for pastoral staff
- Freeze spending for staff and leadership development including all conferences and seminars
- Reduce to one or two internal missions trips
- Freeze and reduce non-essential fixed expenses
- Cancel non-essential leases and contracts, if any
- Challenge congregation with messages, e-mail, letter, etc.
- Start personal studies and prayer/fasting initiatives
Action Trigger Criteria for Moving to Level 3
- Activated after 6 consistent months at the Level 1 triggers and from fiscal year start, or
- Offering dropped by 30% under expected
- Past-due A/P more than $7-10K
- Active until budget is met and deficit resolved or LT changes criteria
Level 3 – Critical
- Release additional staff
- Cancel non-critical programs and focus strictly on weekend services and small groups
- Draw funds from emergency accounts
- Launch mini-capital campaign to raise additional funds
Action Trigger Criteria for Moving to Level 4
- Activated after 8 consistent months at the Level 1 triggers and from fiscal year start, or
- Offering dropped by 40% under expected
- Past-due A/P more than $10K
- Active until budget is met and deficit resolved or LT changes criteria
Level 4 – Crisis
- Reduce staff to essential service related personnel only
- Create and initiate church re-launch strategy
- Evaluate possibility of selling assets
- Lead staff and congregation in fasting/prayer campaign
Here is a PDF of the CCV Cash Flow Management Policy you can share with people on your team.
If you are interested in learning more about the types of coaching I offer, you can do that here.
