Ownership and availability are different questions
A company may own cash that is held as collateral, required by a lender, reserved for a specific contract, or otherwise unavailable for ordinary operating use. Including all bank balances in one available-cash number can overstate liquidity.
Finance should identify the restriction separately from the bank account itself.
Keep a restriction schedule
Record the bank or account, balance, party imposing the restriction, agreement, purpose, effective date, release condition, expected release date, and any minimum balance requirement.
Attach the lender, lease, escrow, grant, or contract document that explains why the cash is restricted.
Reconcile to the bank and the agreement
The account still needs an ordinary bank reconciliation, but the close should also confirm that the required restricted amount matches the underlying agreement.
If the restriction is reduced or released, document the event before moving the cash into unrestricted liquidity reporting.
Show management what is actually usable
Cash dashboards and runway models should distinguish unrestricted operating cash from restricted balances. This matters when the restricted amount is large relative to payroll or vendor commitments.
A business can have a strong total bank balance and still face a near-term liquidity problem if much of that cash cannot be deployed.
Questions buyers usually ask
What is restricted cash?
It is cash the business owns but cannot freely use because of a legal, contractual, lender, grant, or other restriction.
Should restricted cash count toward runway?
Runway analysis is usually more useful when it separates cash that can actually fund operations from balances that are restricted.
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A reliable monthly close is not a pile of categorized transactions. It is a repeatable process that reconciles source accounts, resolves exceptions, reviews the balance sheet, publishes statements, and gives operators a stable version of the month.