How to build a cash budget
A cash budget forecasts the bank balance month by month. Lay one out, add it up and roll it forward to the next month.
Task 1The layout4 questions
A cash budget is a forecast of the bank balance, month by month. It lists only money that will move through the bank, in the month it moves.
- Receipts
- money expected in
- Payments
- money expected out
- Net cash flow
- receipts less payments for the month
- Closing balance
- opening balance plus net cash flow
| Item | £ |
|---|---|
| Receipts from customers | 17,000.00 |
| Materials | (6,000.00) |
| Wages | (7,000.00) |
| Rent | (1,500.00) |
| Other costs | (1,000.00) |
| Total payments | ? |
| Net cash flow | ? |
| Opening balance | 2,000.00 |
| Closing balance | ? |
Task 2One month feeds the next3 questions
Task 3What belongs in a cash budget2 questions