How a Club Could Deal with a Deficit or Negative Closing Cash Position


Mohill Rovers have a planned net cash deficit of €785 in June, resulting in a negative closing cash of €610. When they use a cash flow budget, it allows them to anticipate this issue and take action to address it.


Actions to improve their position:


Spread out payments


A club could arrange a medium-term loan to pay for new equipment in smaller monthly instalments rather than one large payment.


Increase income


A club could organise additional fundraising events, such as a table quiz, or increase membership subscriptions to bring more money into the club.


Arrange finance


A club could agree an overdraft limit with its bank, allowing it to withdraw more than its current account balance to cover a short-term deficit.


Reduce payments


A club could delay purchasing new equipment or negotiate better payment terms with its service providers to reduce outgoing costs.


How a Club Could Deal with a Surplus or Positive Closing Cash


A club could also have periods of positive net cash (a surplus) and a positive closing cash. This provides an opportunity to use the funds for the benefit of the club. Actions to take in their position:


Increase activities


The club could use the surplus to fund more activities for its members, such as organising additional training sessions by renting more pitch space.


Build a cash reserve The club could set aside the surplus each month as a backup fund to cover any unexpected payments or future shortfalls.


Invest in the club


The club could use the surplus to carry out improvements to its facilities, such as upgrading the clubhouse or resurfacing a pitch.


254 2


STRAND 2


CHAPTER 24: Sources of finance and the cash flow budget


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