2D

1
2D GOING SOLO CASH BUDGETS
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Unit 2D
Cash Budget
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
3,700
10,200
1,700
8,200
300
15,500
15,000 15,000 14,000 14,000 13,000
16,500
18,700
25,200
15,700
22,200
12,700
8,000 8,000 7,000 7,000 6,000
8,500
3,800
- 15,000 - 15,000 -
500 500 500 500 500
500
12,800
8,500
23,500
7,500
22,500
6,500
3,700
10,200
1,700
8,200
300
6,200
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Unit 2D
Cash Budget
Cash Budget
A cash budget is prepared to

• monitor the timing of cash in and cash out

• make sure there is enough cash available

• see if and when a bank overdraft is required

• plan the timing of the purchase of a
• fixed asset

• avoid a negative cash flow situation