Cash Budget Example for 2023

What is a Cash Budget?

A cash budget is a financial plan that outlines the estimated cash inflows and outflows of a business over a specified period of time. It is used to plan and keep track of the cash flow position of a business, enabling businesses to identify potential financial problems before they become serious. Cash budgets provide a clear picture of the short-term financial health of a business and help businesses manage their cash flow more effectively.

Why is a Cash Budget Important?

A cash budget is an essential tool for managing a business’s cash flow. It helps businesses to understand their current financial position and anticipate any potential cash flow problems. Knowing the cash flow position of a business can help managers make informed decisions about how to allocate resources, plan for future expenses and identify areas of potential savings.

How to Create a Cash Budget?

Creating a cash budget is fairly straightforward, but it’s important to have a good understanding of the business’s financial position before creating the budget. The first step is to gather all the necessary financial information such as cash receipts, invoices, bank statements, and other financial documents. Once all the information is collected, the cash budget can be created using a spreadsheet or other budgeting software.

Cash Budget Example for 2023

In this example, we will be creating a cash budget for a business in 2023. The business is expecting to have $50,000 in cash receipts and $30,000 in expenses per month. The cash budget will include the following categories:

• Cash Receipts
• Expenses
• Net Cash Flow
• Cash Balance

Using the above information, the cash budget for the business in 2023 is as follows:

As you can see, the cash budget provides a clear picture of the business’s cash flow position. The budget also shows how much cash is available to the business and helps to identify potential cash flow issues before they become serious.