2D GOING SOLO CASH BUDGETS

Cash BudgetUnit 2D A cash budget allows us to monitor cash flow It shows future planned receipts and payments of cash Here is an example of a cash budget: July Aug Sept Oct Nov Dec Opening Balance Add Receipts: Sales Total Receipts Less Payments: Purchases Equipment General Expenses Total Payments Closing Balance 1,000 15,500 8,500 3, ,000 15,000 14,000 14,000 13,000 8,000 8,000 7,000 7,000 6, , , ,500 12,800 3,700 18,700 8,500 10,200 25,200 23,500 1,700 15,700 7,500 8,200 22,200 22, ,700 6,500 6,200

Unit 2DCash Budget A cash budget is prepared to: make sure there is enough cash available monitor the timing of cash in and cash out see if and when a bank overdraft is required plan the timing of the purchase of a fixed asset Cash Budget avoid a negative cash flow situation