Should a NFP Budget include starting cash balances?
I am working on a budget for a NFP client. I created a budget in Excel that includes Revenue and Expenses based on historical data. When I emailed the budget, one of the members asked me why I wasn't including the starting cash balances. I haven't responded yet.
I understand that the starting cash balances represent the amount of cash the organization had at the beginning of the budget period, but why would I include cash balances on the budget if the statement of activities shows a deficit without them? Their bylaws state that they cannot operate with a budget that is in a deficit.
Please help me understand this. Is the member correct? Should I be including starting cash balances?
