What Are the Uses of Cash Budgeting Procedures? Original post by
Michael Wolfe of Demand Media After a company has prepared its
operating budget, it will often draw up a separate cash budget
as a means of tracking income and cash expenditures throughout
the year. Such a budget has a number of practical uses, all of
which center around being able to accurately predict when the
company will be flush and when cash flow may be restricted. Map
Inflows and Outflows The primary use of a cash budget is that it
allows a company to map out expected inflows and outflows of
cash during a specified period of time, usually a year. This map
will take into account when the company expects to receive
revenues and when it may need to spend those revenues on
expenses not covered in the operating budget. This serves as a
road map, giving the company a rough outline of how much cash it
will need during the year. Predict Cash Shortages One advantage
of cash budgeting is that this method can be used to accurately
predict when the c