2. Cash Flow Budgeting
Cash flow budget used for?
What items are included in cash
inflows and cash outflows?
What adjustments can be made in
cash balance?
3. A cash budget is prepared to
Monitor the timing of cash IN cash OUT
Make sure there is enough cash
available
See if and when a bank overdraft is
required
Plan the timing of the purchase of a
fixed assets
Avoid a negative cash flow situation
8. Cash Flow Budgets Can
Be:
Annual
Quarterly
Bi-monthly
Monthly
1. Estimate cash inflows and outflows for
the entire year first.
2. Distribute the annual totals among the
periods within the year.
9. Preparation of cash budget
Estimating cash receipts
Cash sales
Collection from debtors
Interest / dividends on investment
Sale of assets etc
Loans, advances, deposits, etc
10. Preparation of cash budget
Estimating cash payment
Payment for purchases
Payment of overheads
Purchase of assets
Payment of creditors
Payment for taxes
Payment for dividends/interest etc
Repayment of loan / advances / deposits etc
11. Budget within the year
Jan-
Feb
Mar-
Apr
May-
June
July-
Aug
Sep-
Oct
Nov-
Dec
Cash
Inflows
- Cash
Outflows
=
Balance