What is cash budget?

• The cash budget is a statement of expected future cash receipts and payments
• It assists decision making by:


• documenting timing of all cash receipts and payments
• helping to identify periods of expected cash shortages and surpluses 
• identifying suitable times for purchase of non-current assets
• assisting with planning and use of borrowed funds
• providing a framework for ‘what if’ analysis 
• For an entity that provides goods or services on credit, one of the main tasks in the preparation of a cash budget is calculating the cash receipts from the credit sales or fees generated
• This is commonly shown in a schedule of receipts from debtors/accounts receivable

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