Hydraulic ram pumps and Sling Pumps

OP-32-E2. Estimating expenditure over shorter periods of timeThe overall budgeting provides a clear idea of the total amount of finance which is going to be neededover a period of time (usually one year), but does not give information about the cash flow requiredover short periods of time (monthly). Estimates need to be made about how much money is going tobe needed at what time. Usually, this estimate is made for each month. It is impossible to provide agood service unless you know when money is needed to pay bills on time.3. Planning revenueRevenue can be classified according to the source and the time when the money is expected to bereceived. Sometimes, estimates have to be made because there is a high level of uncertainty aboutrevenue sources. To estimate revenue accurately it is necessary to have information about:the total number of users (legally and illegally connected),the number in each category of user (residential, commercial, industrial, institutions),the number of users who do not pay on time,tariffs by type of user,connection and registration costs by type of user,income from alternative financial sources, other than tariffs,the number of users estimated to connect to the system over a year.4. Comparing revenues and expenditureA revenue and expenditure comparison allows a committee to determine the financial viability of theservice. This comparison tells committees, when expenditure is higher than income, that there is aneed for new income sources or a need to reduce costs. If there is a balance or a surplus the financialviability of the service has become a reality. Another important comparison is between the revenuecash flow and expenditure over a short period of time. These two financial flows should be in balanceif the enterprise is to receive enough money (from users for example) to pay its bills on time. It is notpossible for a system to keep functioning if the revenue money is not received in time to meet bills.Table 12:Basic financial management issues for budgetingFinancial management issuesWhat costs to budget for?What sources of revenueshould be counted?Does the enterprise have enoughrevenue to cover total costs?2.4.2 Revenue collectionPossible options• Remuneration• Tools and spare parts• Small repairs only• All repairs• Extension, rehabilitation or replacement• Fuel, power, etc.• Depreciation• Initial investment• Regular user payments• Village funds• Voluntary contributions• Credit schemes• Government subsidy• Private sector involvement• Yes, there is surplus• No, there is a deficit• There is a small deficit, so there is a need to look foralternative financial sources or to raise tariffs• There is a big deficit, so special contributions may beconsidered or the project may need to be revisedThe aim of organising financial flows is to ensure that resources arrive in time to guarantee sustainablefunctioning of the water service. For this reason it is useful to think about:• ways of presenting bills to water users,• what the billing and collection periods will be,• providing one or more places where water bills can be paid,44