What is a Cash Budget?
The cash budget is an accounting device that is used to effectively monitor and manage the immediate cash flow of a home or business budget. Many people choose to employ a cash budget approach as a quick and easy way to monitor the financial condition of the household or a small business on a daily, weekly, or monthly basis. Generally, cash budgets are used to manage short-term cash flow by creating an organized means of keeping up with cash receipts and balancing them against cash disbursements during the accounting period. Part of the genius of a cash budget is the simplicity of the approach. Often, it is possible to employ the principle of a cash budget by using a basic spreadsheet. Creating columns that make it possible to record basic information, it is possible to tell at a glance how much money came in for the period, and how much went out. This is accomplished by recording each cash receipt and cash disbursement on the spreadsheet. Often, the date, amount, and a brief descripti
