Cash Budget
Section B
Cash Budget
Table of contents
Introduction 2
Cash Management 2 Cash 2 Budget 3 Cash budget 3 Identify Cash Management 4 Construction sector 5
Conclusion 9
Reference 10
Introduction
Cash management in this economic environment is crucial. Cash is the life-blood of any business. As the saying goes, “Cash is king”. With so many banks tightening credit standards due to what’s happening in the credit markets or within their own lending portfolios, it is crucial that businesses fully understand their cash needs IN ADVANCE and make adjustments to their operations to ensure that cash is available. Otherwise, companies may find themselves in a liquidity crisis –unable to meet payroll, pay suppliers, or pay subcontractors - which leads to bankruptcy or an operational shutdown.
Cash Management
Cash
Cash is used to pay company debt and meet daily operating needs. It is a current asset that includes currency, coin, paper money, money orders received from customers and travelers’ checks. Accountants define cash as money on deposit in banks and ant items that banks will accept for deposit. On the other hand, note receivable, IOUs, postdated checks (checks dated in the future), and uncollected customers, check-returned by the bank stamped “NSF” (Not Sufficient Funds) – are not accepted for immediate deposit and are not included in the accounting’s definition of cash.
Budget
Budgeting is the process of preparing a plan, commonly called a budget. A budget is a financial plan for the upcoming period. A capital budget, on the other hand, involves an organization's proposed long-range major projects. This section is focusing of budget either Public or private entities engage in the budgetary process. A budget is a quantitative plan of operations that identifies the resources needed to complete the organization's goals and objectives. It includes both financial and nonfinancial aspects. A master budget comprises operating budgets
Cash Budget
Table of contents
Introduction 2
Cash Management 2 Cash 2 Budget 3 Cash budget 3 Identify Cash Management 4 Construction sector 5
Conclusion 9
Reference 10
Introduction
Cash management in this economic environment is crucial. Cash is the life-blood of any business. As the saying goes, “Cash is king”. With so many banks tightening credit standards due to what’s happening in the credit markets or within their own lending portfolios, it is crucial that businesses fully understand their cash needs IN ADVANCE and make adjustments to their operations to ensure that cash is available. Otherwise, companies may find themselves in a liquidity crisis –unable to meet payroll, pay suppliers, or pay subcontractors - which leads to bankruptcy or an operational shutdown.
Cash Management
Cash
Cash is used to pay company debt and meet daily operating needs. It is a current asset that includes currency, coin, paper money, money orders received from customers and travelers’ checks. Accountants define cash as money on deposit in banks and ant items that banks will accept for deposit. On the other hand, note receivable, IOUs, postdated checks (checks dated in the future), and uncollected customers, check-returned by the bank stamped “NSF” (Not Sufficient Funds) – are not accepted for immediate deposit and are not included in the accounting’s definition of cash.
Budget
Budgeting is the process of preparing a plan, commonly called a budget. A budget is a financial plan for the upcoming period. A capital budget, on the other hand, involves an organization's proposed long-range major projects. This section is focusing of budget either Public or private entities engage in the budgetary process. A budget is a quantitative plan of operations that identifies the resources needed to complete the organization's goals and objectives. It includes both financial and nonfinancial aspects. A master budget comprises operating budgets