Preparing a Cash Budget

 

Self-Assessment

Ask yourself:

1.      How does cash flow into and out of my company throughout the year?

2.      Are we able to meet our current financial obligations and goals, and can we accommodate future changes without exceeding our budget?

3.      With a reasonable degree of accuracy, what will our funds balance be at the end of this month? Mid-way through the fiscal year? At the end of the year?

4.      What is our "cash plan" for the coming month, quarter or year?

 

 Self-Assessment

Ask yourself:

1.      How does cash flow into and out of my company throughout the year?

2.      Are we able to meet our current financial obligations and goals, and can we accommodate future changes without exceeding our budget?

3.      With a reasonable degree of accuracy, what will our funds balance be at the end of this month? Mid-way through the fiscal year? At the end of the year?

4.      What is our "cash plan" for the coming month, quarter or year?

Note:

You will need to gather the following financial statements: balance sheets and income statements for the current period as well as the most recent 2-3 years, as well as sales forecasts for the current period and the coming year. 

In regard to maintaining a cash reserve, ask yourself the following questions:

1. How much cash is necessary for meeting short-term obligations in case of a cash-flow emergency?

2. How much money do we currently keep on hand?

3. If we are holding too much, how could the excess be put to better use? If we are not holding enough, what is our plan for making up the difference?