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Understanding Cash Budgets. A cash budget is used to estimate the cash inflows and cash outflows anticipated by a company over a period of time. Budgets are often looked at over a 1-month, 3-month or 12-month time period.
In its simplest form a budget is a plan or forecast in the form of a list, showing spending items and/or incoming revenue items, with a figure for each item. As time passes, actual spending or revenue may be entered into the list to compare with the originally budgeted figure.his article defines, explains, and illustrates the term budget, with examples, in context with related terms including capital budget, operating budget, cash budget, zero-based budgeting, and variance analysis.