I was recently asked a question about whether or not there is a standard or best practice in operating reserves – six month reserve, 12 months, etc. Realizing that there are a variety of variables to consider when an organization determines what is appropriate for them when establishing an operating reserve, I was unable to ascertain whether or not there is a true best practice. Some use 3-6 months while others feel a 6-12 month operating reserve is better.
What is your thought?
Posted by Kathy Grochow, NRS, St. Cloud
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