This checklist is designed to assist in the preparation and maintenance of a cash budget, ensuring that all income and expenditures are accurately forecasted and monitored to maintain financial stability.
Collect data on past cash inflows and outflows for the previous months or years to establish a baseline for the budget.
Project expected cash receipts based on historical data, sales forecasts, and any anticipated changes in income.
Forecast all anticipated expenses, including fixed and variable costs, payroll, and any other outflows.
Subtract total projected cash outflows from total projected cash inflows to determine the net cash position for the budget period.
Consider any required cash reserves or minimum cash balance requirements to ensure liquidity.
Review the initial cash budget for accuracy and make necessary adjustments based on feedback and changing conditions.
Put the finalized cash budget into action, monitoring actual cash flows against the budgeted amounts regularly.
Continuously track cash inflows and outflows against the budget and make adjustments as necessary to reflect actual performance.