Cash budget - budgetary planning and control, Cost Accounting

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Cash Budget - Budgetary Planning and Control

This can records the cash outflows and inflows that are expected to take place in respect of every functional budget. This may be prepared for a duration span of one week, quarter or month of the budget period.  It has the given advantages/benefits as:

1. It ensures about enough cash is available when essential.

2. It implies whether capital expenditure projects can be financed internally.

3. It implies the cash needed for current operating activities.

4. It implies the effect the position of every seasonal requirements or needs, large stocks, unusual or abnormal receipts and laxity in collecting account receivable.

5. It implies the availability of cash for taking benefit of discounts.

6. It reveals the availability of excess cash hence short-term investments may be considered.

7. It serves like a basis for evaluating the genuine cash management performance of responsible managers.


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