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How Cash budget helps business to manage cash for growing business.


Cash Budget and its benefits=

Budget which is prepared for dealing and managing cash and cash related issues is called cash budget.

Cash budget is mainly used by management for the purpose of planning and forecasting future cash flows. It also helps the management in following ways:
  • It helps management in coordinating activities through which every employee can be guided and helped to complete the given task in efficient way.
  • It helps management to be aware of available resources in advance by checking cash budget, which also lets management to plan future activities according to available resources and save a lots of time.
  • As other budget do cash budget also helps in evaluating the performance of the activities within the business.
  • Through cash budget management can delay liabilities payments to manage cash for other business activities.
  • Idle cash could be planned to be easily invested with the help of cash budget.
  • This type of budget also helps to manage cash receivable and increase the collection of account receivables for the business which helps to decrease the chances of loss.
  • Inventory can be easily managed with cash budget for example if the inventory is planned more than available resources then through cash budget it can be controlled and inventory level can be decreased or increased according to the requirements.


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