A Cash Budget is simply a way of keeping track of your incoming flow of money and your disbursements (outflow) per month or week.

It’s a real-time inflow and outflow cash management system. It is not a budget, budgets have another purpose, besides they are static. You can use an Excel spreadsheet, like the image in this post, or a more sophisticated system.

What is the purpose of it?

The primary reason you should establish and maintain a cash budget is to manage and control your expenses, which represents your outflow of money.

Why is it important?

It is essential because it enables you to get better control of your business expenses.  You cannot exercise control over your income but on your outflow.  You know when the electrical charge will hit your bank account when payroll is due, and you need to submit the payroll tax deposits or when you need to cut a check for your consultants, or the credit card payment will be due.

With the maintenance of a Cash Budget, you can synchronize the money that will be withdrawn from your bank account with the expected inflow of cash.

If you need assistance in setting up and understanding this process, call us to set up an appointment and we’ll be happy to walk you through it.

Give Us a Call at 914-752-3632.