Accounting Funding Requirement (Monthly) Calculator Examples
Review worked monthly cash-flow scenarios showing when a business has a funding gap, meets its reserve, or has cash above reserve.
These examples show how opening cash, collections, planned contributions, payments, and a reserve target affect the monthly funding result. In a balanced case, $35,000 of available cash and $30,000 of payments leave $5,000, exactly meeting a $5,000 reserve. In a shortfall case, $28,000 available and $31,000 of payments produce negative $3,000 closing cash; with a $4,000 reserve target, the funding requirement is $7,000. In a surplus case, a business with $50,000 available, $38,000 of payments, and a $6,000 reserve has $6,000 above reserve.
How to Read Your Results
Monthly funding requirement is the additional cash needed to end the month at the selected reserve target.
Projected closing cash is the expected month-end balance before any additional funding is added.
A result of $0 funding requirement means the entered cash plan covers payments and the reserve; it does not mean actual timing risk is eliminated.
Cash above reserve is the amount projected to remain after planned payments beyond the selected reserve.
Use expected receipt dates and payment dates separately when a monthly total may hide an early-month cash squeeze.
Assumptions & Important Notes
- Each scenario uses one monthly period and one currency.
- Expected collections are assumed to be received during the month.
- All listed payments are assumed to leave the bank during the month.
- Figures are illustrative cash-flow estimates, not forecasts of profit or business value.
Related Examples
Frequently Asked Questions
What is an example of a monthly funding gap?
If a business has $28,000 available, expects $31,000 of payments, and wants a $4,000 reserve, its estimated funding requirement is $7,000.
What happens when projected closing cash equals the reserve?
The funding requirement is zero because planned cash is sufficient to meet payments and finish exactly at the reserve target.
How does a higher reserve affect the examples?
Increasing the reserve raises the funding requirement by the same amount when all other inputs stay unchanged.
Should a seasonal business use one example for the whole year?
A separate monthly estimate is generally more informative because collections and payments can vary substantially by season.
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