Journal · 2026-01-18
What Belongs in the Cash Section of a Board Pack
A concise checklist for liquidity narrative, covenants, and the one chart directors actually use.
Directors do not need a second copy of the general ledger. They need to know whether the company can meet the next two quarters of hard obligations, what would break that picture, and what management is doing about it.
A useful cash section opens with a plain sentence: current cash, committed facilities, and weeks of runway under a base case. Then show a bridge from last quarter’s forecast to actuals — the variances that matter, not every line item.
Include covenant headroom if lenders are in the picture. Silence on covenants reads as avoidance. State the nearest test date and the buffer in currency or ratio terms the board already understands.
One chart beats five: a 13-week ending-cash line with a shaded downside case built from slower collections, not from vague “stress.” Label the assumption that drives the downside so directors can argue the premise rather than the drawing.
When we prepare a board cash memo, we cut ornamental waterfall charts that do not change a decision. If a slide cannot answer “so what do we approve or watch?”, it belongs in the appendix or the shredder.