Notes for author/editor for creating word documents



Cash Budget NotesLearning IntentionsAt the end of this lesson students will be able to:? Apply my accounting skills and prepare a Cash Budget ?Understand the importance of monitoring cash and preparing a cash budgetRecord-keeping is a mustYour mini-company needs to know where it stands financially.Are we making a profit? What are we selling?What are our costs?Do we have sufficient cash – enough to pay our bills as they become due?How to Prepare a Cash BudgetPreparing a cash budget is similar to preparing other budgets, in particular the household budget. Most businesses use a cash budget template, either manual, in /Excel or other software package.A cash budget should list all the incoming and outgoing cash items for the duration of the competition. For each month, list the items and total the figures under the headings Cash Incoming and Cash Outgoing. Cash In: Receipts Cash Out: PaymentsCapital SalesLoansGrantsPrize moneyCash PurchasesPurchasing of assetsPaying Expenses Five Steps to Creating a Cash BudgetPrepare a skeleton template and insert opening cash.Record all Cash In, month by month and add up to give total receipts.Record your cash out, month by month and total paymentsCalculate your net cash ( Total cash in – Total Cash out)Calculate your closing cashCash Budget for xxxxxxxxxDetailsSepOctNovDecJanFebMarAprilMayTotal Receipts€€€€€€€€€€1. Total ReceiptsPayments2. Total Payments3. Net Cash [1 – 2]4. Opening Cashxxxxx5. Closing Cash [3 + 4]The opening cash of September is 400The closing cash of September becomes the opening cash of October.The opening cash in total is the opening cash of SeptemberExtract of cash budget to explain opening and closing cashSeptemberOctoberNovemberTotal3. Net Cash [1 – 2]1,5002,000 3003,8004. Opening Cash4001,9003,900 4005. Closing Cash [3 + 4]1,9003,9004,2004,200 ................
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