A budget is an instrument of management used as an aid in the planning, programming and controlling of business activity. Budget is based upon past statistical data and it predicts the estimated labour, sales, production and other management requirements for future. A cash budget is a budget or plan of expected cash receipts and disbursements during a particular period of time. This could be weekly, monthly, quarterly, or annual budget. This budget is used to assess whether the entity has sufficient cash to continue operating over the given time frame. The cash budget starts with the beginning cash balance to which the cash flows are added to get available cash. Cash flows for the period are then subtracted to calculate the cash balance before financing. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payments. In other words, a cash budget is an estimated projection of the company's cash position in the future.

Abhijith S

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