This checklist is designed to guide the process of creating a cash budget for the upcoming period, ensuring that all income and expenses are accounted for and that sufficient cash flow is maintained to meet operational needs.
Collect historical financial data, including past cash inflows and outflows, to establish a baseline for the cash budget.
Project future cash inflows based on anticipated revenue, collection schedules, and other income sources.
Estimate future cash outflows, including fixed and variable expenses, payroll, and any other anticipated expenditures.
Subtract total estimated cash outflows from total estimated cash inflows to determine the net cash flow for the budgeting period.
Review current cash reserves and consider any planned expenditures that may impact cash availability.
Make adjustments to the cash budget based on the net cash flow analysis and cash reserves to ensure a balanced budget.
Present the cash budget to management or the finance committee for review and approval before finalizing.
Implement a system for ongoing monitoring of cash flow against the budget throughout the period, making adjustments as necessary.