Governments may find that they do not need sophisticated software to
project their cash flows.A good understanding of the entity’s cash flow patterns
and a simple spreadsheet software program are all that is needed to create a
usable cash flow forecast. Table 2.1 presents a sample cash flow forecast that
was prepared using an electronic spreadsheet. This forecast demonstrates
cash flows for a local government that receives property tax revenue and
sales tax revenue. Property taxes come in twice a year, in January and July.
Sales tax revenues and other revenues come in steadily throughout the year.
This forecast shows the government’s actual cash flows for the first quarter
of the year and its projected cash flows for the remainder of the year. The
government would prepare a forecast for the current fiscal year and the next
one to two years, depending on its investment horizon.