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Cash Flow Budget

The cash flow budget tells if you have sufficient money to pay your bills at the end of the month.

A cash flow budget is a chronological overview of expected income and expenses over a given period of time. The cash flow budget looks much like the operating budget. It has many of the same budget lines

Cash in hand

The cash flow budget focuses on the cash (accessible money) that actually can to be taken out of the cash box or the bank - cash to pay salary or debtors. It also focuses on cash that is actually received from customers - cash you can see in the cash box or in a bank statement.

Capital requirement

A cash flow budget shows a company´s monthly capital requirement. Some months there might be lack of cash to keep the business in operation. If the cash flow budget shows a lack of money at the end of a month you have to find the money which is needed. It can be found in different ways:

• You can borrow more money from the bank
• You can make your debtors pay earlier
• You can delay the payment to your suppliers
• You can cut down expenses
• You can postpone larger investments
• You can stop withdrawing money to yourself
• You can introduce "cash on delivery"
• You can combine all of the possibilities

You might need help to cash flow budget

The establishing budget and operating budget are fairly easy to make for “non accountants”. The cash flow budget is a bit more difficult. There are more unknown figures to calculate and evaluate. This demands a clear view of the budgets.

However, it is still basically common sense so you can do it.

Download cash flow budget

You will find an excel spread sheets with a pre-defined cash flow budget in the Download Center

Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside.
- Saras D. Saravethy, professor in entrepreneurship