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Cash budget is a detailed budget of income and cash expenditure including both capital and revenue items. For control reasons the year's budget is usually phased in smaller periods for illustration: monthly or quarterly. Because the cash budget is related with liquidity it should reflect changes in closing and opening balances of debtors and creditors. This must also focus on another cash inflows and outflows. The cash budget demonstrates cash flows arising from asset structure and the profit and the operational budgets. A cash budget can be prepared through considering all the expected payments and receipts for budget period. All the cash outflow and inflow of all functional budgets involving capital expenditure budgets are seems. Adjustments and accruals in accounts will not influence the cash flow budget. Anticipated cash inflow is inserted to the opening balance of cash and all cash payments are deducted from this to attain the closing balance of cash.
Format of Cash Budget
Period: First Quarter of 2005
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