A cash budget forecasts estimated cash receipts, payments, and cash position over a period of time. It assists businesses in identifying when commitments are due to ensure money is available, reveals periods of excess or shortage of funds, and is often demanded by banks when businesses apply for loans to determine repayment capability. Cash budgets are a form of control that set targets to monitor employee work and investigate differences between actual and budgeted figures.

1. Cash Budgets A cash budget is a forecast of estimated cash receipts, estimated cash payments and the resultant cash position for a certain period of time. Cash Budgets