Cash Budget

A cash budget is an estimation of the cash flows for a business over a specific period of time. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payment.  Its primary purpose is to provide the status of the company's cash position at any point of time. Additionally, the cash budget helps in prioritizing payments in the budget period. It can identify any times where there may be a shortage of cash. This will allow the business to plan ahead and arrange extra funding such as a bank overdraft. It can help to regulate expenses.

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