There is always uncertainty in business. You never know when a crisis can hit. It is better to plan in advance. Income may be stagnant in any business but bills are not going to wait for the cash inflow. So a business needs a cash flow budget to ascertain when it may fall short and in case of excess funds if you can plan an acquisition.
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5 Steps to Write a Cash Flow Budget
Step 1: Period of Cash Flow Budget
The first step in preparing a budget is the time frame for which you are making the budget. It can be weekly, monthly, quarterly, half-yearly or yearly. In case of any long term project, it can be extended up to the life of the project. The period of a cash flow statement can also be based on industry practices.
Step 2: Determine the Income
Here it is important to know your sales projections or to make a realistic estimate of your income. The allocation of expenses depends solely on the total income that you will calculate. In case there is any doubt about an income’s inflow, it is better to omit that income following the principle of prudence.
Step 3: Project Your Expenditure
After inflows, come the outflows. The major expenses are purchase, salaries, rent, maintenance, etc. Divide the expenses as fixed or variable, capital or revenue, etc. After ascertaining the expenses, project the probable outflow. For this purpose, you can refer to the previous year figures. Following the principle of prudence, write down those expenses as well which has a remote possibility of occurrence.
Step 4: Calculate the Net Cash Flow
Deduct the cash outflows from the cash inflows. Now you have net cash flow which can be surplus or deficit. If there is surplus cash, then it is good. But in the case of deficit, you need to review the budget. You may need to bring in some working capital loan if the deficit is large. You should set a minimum cash balance.
Step 5: Cash Flow Format
Cash flow is a statement which shows cash inflows, outflows, and balance. Two methods are there for making a cash flow- direct and indirect method. Have an understanding of the two methods and choose which one do you wish to use. It is not necessary to abide by any of the methods. You can simply make your own format which will serve your purpose.
10+ Cash Flow Budget Templates
1. Cash Flow Budget Template
This is a simple cash flow statement template which you can download instantly to prepare cash flow and get an idea of your cash inflows and outflows, to determine the future cash flows you will have to pay off your expenses and plan any acquisition of assets. This template is available in all file formats.
2. Weekly Cash Flow Budget Template
This is a cash flow analysis template which has a simple format showing cash received and cash disbursed and net cash flow. You can use this template to prepare your cash flow budget on a weekly basis. You can project your cash flows for six weeks. It is an editable and printable template.
3. Quarterly Cash Flow Budget Template
This is another simple budget template for making a quarterly cash flow forecast for your business. It is a professional looking template which will help you save your time and money. You can use this file in all formats. Again the format used is simple. Use this template to plan a cash budget in order to realize your business goals.
4. Free Cash Flow Budget Template
This is a free cash budget template which is made as per standard format of a cash flow dividing the various business activities. This is a print-ready template which is fully customizable. You can download this template for free, anytime and anywhere. It has a professional look and you can easily change the color.
5. Editable Cash Flow Budget Format
You can download this editable format in order to forecast your monthly cash inflows and outflows. It has almost every expense covered in this sample financial budget template. All you have to do is enter the details and it is done. The format is simple, professional as well as quick and easy to edit.
6. Sample Cash Flow Budget Template
If you are into the farming business, this sample budget template is for you. The income section is blank so that you can fill it according to your business operations, which can be from dairy, grains, vegetables, etc. As for the expenses section, it includes almost every expense of the farming business. It is a printable format.
7. Standard Cash Flow Budget Example
If you are not using any template or any other format and wish to prepare your cash flow statement from scratch, you can refer to this example. You can prepare a cash flow in a statement format or a report format. This example contains both of these. The instructions are also given to facilitate you.
8. Printable Cash Flow Budget Worksheet
This is a cash flow budget template to determine half-yearly cash inflow and outflow of your business. The general and revenue expenses are not divided into any further headings. The capital expenditure and others like drawings are written separately. You can use this format or may refer to simply create one.
9. Cash Flow Budget Worksheet Example
This is a detailed budget template for your dairy and farm business. It contains the previous two years’ figures as well to facilitate comparison. The projections are made quarterly. There is a notes section alongside it, which can be used to explain the reason for allocating a particular amount for an expense. There are instructions provided as well.
10. Elegant Cash Flow Budget Example
If the business is a large one, then it is better to make a detailed and monthly sample budget template as is done in this example. This is an elegant looking cash flow budget format for dairy and farm business. The levied taxes, loan interest, and other expenses are also described in a clear way. You can refer to this example to prepare your farm cash flow budget.
11. Projected Cash Flow Budget Statement
In case you are preparing a cash budget template for the first time, you need to understand the terms and approach used in preparing one. This template is a step-by-step guide for making cash flow. Right from understanding the concept of cash flow to finalizing one, you can refer to this example.