1. Preparation of budgets
Sales/Cash Receipts, Inventory Purchases/Cash Payments, Selling & Administrative/Cash Payments, and Cash Budget

2. Participative Budgeting
Involve all who must live by the budget in the budgeting process
Use team work to get the best results
Management must make sure employee goals fit with company goals
Management is involved to make sure the budget is efficient, challenging but achievable

3. Sales/Cash Receipts Budget
Quarterly
Projected sales revenues– involve sales people in forecast, economic forecasts, competitor trends, etc.
Static budget – shows one level of activity
Projects total revenues earned
Projects patterns of cash flow from cash sales and collections on account

4. Inventory Purchases Budget/Cash Payments
Quarterly
Tied into the sales budget
Allows planning to meet sales demand and on-hand inventory
Projects pattern of cash payments for inventory
Static budget

5. Selling and Administrative Expense Budget/Cash Payments
Quarterly
Maps out expenses and cash paid for expenses
List fixed costs, such as office salaries , estimated average utility costs, depreciation
List variable costs, such as selling supplies and sales commissions (often a % of total sales projected)
Projects cash payment patterns
Static budget

6. Cash Budgets Quarterly Projects cash needs from month to month
Data comes from Sales/cash receipts budget, inventory purchases/cash payments budget, Selling and administrative/cash payments budget
Planning helps company project cash shortages and implement a line of credit or establish other borrowings
Static budget