Cash flow budget

The cash flow budget summarises the expected cash inflows and the expected cash outflows of a business over a budget period. It is usually prepared on a monthly basis, but can be for shorter or longer periods depending on the needs of management. The main purpose of a cash flow budget is to determine when cash surpluses are likely to be available for investment or when cash deficits are likely to arise requiring additional finance. The cash flow budget is also referred to as the “cash flow forecast”.

 

reference: Business Studies / Accounting. Accounts & Finance Glossary. Jim Riley BA(Hons) MBA FCA // tutor2u

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