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Module 2: Discussion
10 RepliesThe Cash flow budget is being created every week in my Institution, this is because we needed to track cash in and cash out every week.
303 Replies
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2 Replies
A cash flow budget is an estimate of all cash receipts and all cash expenditures that are expected to occur during a certain time period. In order to keep in track with project budget cash flow budgets must be done every month. This helps to see if implementation is on track according to agreed budget.
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1 Reply
In my organization we check the cash flow ata monthly base. This helps to control the cash and expected expenses and assure the organization will have enough money pay the bills, run the planned activites and to present the accountability on time.
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I believe that my organization should create a cash flow budget every three months because
it will help the finance team to oversee the fluctuation of cash received and spend as well as can forecast how long the cash will be available.I am located in Malaysia. We are running a few modules of progarammes such as livelihood, education and capacity buiding.
My budgeting should start by 1st week of December every year.
The reason I choose this date because we can give a time for the program team to list out the details of existing budget and to be proposed for next year budget before proceed to the senior management and finance manager to justify the budget allocation.
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Cashflow budget should be prepared every month. This is because most cash outflows is done on monthly basis and thus doing the budgeting monthly can enable the organization see a true picture of their liquidity position.
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I tend to think it has to be done on a monthly basis. Anything less than that would be excessive. Anythng longer than that may lead to discrepancies.
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Cash flow budget should created in monthly basis, since most of the operational expenses are recurring monthly, such as employee's salary, electricity and water bill, car rents, etc.
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the frequency for the cash flow plan is monthly in principle ... in reality, it is done according to the provision of funding
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I think my organization should create a cash flow budget every month so we can keep track of expenditures and make sure we are staying on track.
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Preparation of a Cash flow budget depends upon an organization.... nature of business, policies and it management. There is no rule to follow.
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Our organization should create a cash flow budget every three months because it is realistic to plan cash flow in and cash flow out in a reasonable period for a judicious track.
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Every three months is alright for my organization as we are yet to get constant client as our services are one time services. Which after implementation may take time before another job may surface, thus we are working on creating multiple streams of income by selling these equipment with which we offer services on the short term and working on production of these equipment on the long term.
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How efficient is this?
Is it not cumbersome and time consuming? -
it should be done ideally on monthly basis or every 3 months (max). The reason is that payment of salaries and operational outflows have to be paid on monthly basis. However, there is also a risk that it might be more efficient and less of a burn to do it every 3 months. I would recommend that small org do it on monthly basis and big org (probably with more liquidity) every 3 months.
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I think it depends on the size of the organization. If operating a large organization, calculating cashflow every week would be more wise in order to be on top of the considerable amount of cash coming in and going out of the organization. However, in a small organization with limited incomes and expenditures a monthly cashflow may be more appropriate.
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Cash is so important to the operations of a company that, often, companies will arrange to have an emergency cash source, such as a line of credit, to avoid defaulting on current payables due and also to protect against other unanticipated expenses, such as major repair costs on equipment. This line of credit would be similar in function to the overdraft protection offered on many checking accounts.
Because the cash budget accounts for every inflow and outflow of cash, it is broken down into smaller components. The cash collections schedule includes all of the cash inflow expected to be received from customer sales, whether those customers pay at the same rate or even if they pay at all. The cash collections schedule includes all the cash expected to be received and does not include the amount of the receivables estimated as uncollectible. The cash payments schedule plans the outflow or payments of all accounts payable, showing when cash will be used to pay for direct material purchases. Both the cash collections schedule and the cash payments schedule are included along with other cash transactions in a cash budget. The cash budget, then, combines the cash collection schedule, the cash payment schedule, and all other budgets that plan for the inflow or outflow of cash. When everything is combined into one budget, that budget shows if financing arrangements are needed to maintain balances or if excess cash is available to pay for additional liabilities or assets.
The operating budgets all begin with the sales budget. The cash collections schedule does as well. Since purchases are made at varying times during the period and cash is received from customers at varying rates, data are needed to estimate how much will be collected in the month of sale, the month after the sale, two months after the sale, and so forth. Bad debts also need to be estimated, since that is cash that will not be collected. -
Cash is so important to the operations of a company that, often, companies will arrange to have an emergency cash source, such as a line of credit, to avoid defaulting on current payables due and also to protect against other unanticipated expenses, such as major repair costs on equipment. This line of credit would be similar in function to the overdraft protection offered on many checking accounts.
Because the cash budget accounts for every inflow and outflow of cash, it is broken down into smaller components. The cash collections schedule includes all of the cash inflow expected to be received from customer sales, whether those customers pay at the same rate or even if they pay at all. The cash collections schedule includes all the cash expected to be received and does not include the amount of the receivables estimated as uncollectible. The cash payments schedule plans the outflow or payments of all accounts payable, showing when cash will be used to pay for direct material purchases. Both the cash collections schedule and the cash payments schedule are included along with other cash transactions in a cash budget. The cash budget, then, combines the cash collection schedule, the cash payment schedule, and all other budgets that plan for the inflow or outflow of cash. When everything is combined into one budget, that budget shows if financing arrangements are needed to maintain balances or if excess cash is available to pay for additional liabilities or assets.
The operating budgets all begin with the sales budget. The cash collections schedule does as well. Since purchases are made at varying times during the period and cash is received from customers at varying rates, data are needed to estimate how much will be collected in the month of sale, the month after the sale, two months after the sale, and so forth. Bad debts also need to be estimated, since that is cash that will not be collected. -
How efficient is this?
Is it not cumbersome and time consuming? -
It depends on the organization. My previous organization create monthly cash flow budget at the end of each month after pay roll. So, every team in the organization can know how much we can spend and how much income will come.
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Since my organization plan everything ahead yearly which including budget for the project. Cash will be preserved for each project in advance. Each project keep track on their spending monthly. However, observing cash flow still need to make sure that money will be transfered from central office to the field office on time. Therefore, monthly cash flow is suitable for my field office.
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I believe our organization should do it every three months considering that the projects we work on normally take more than 3 months to be completed, in that case, cash inflow wont vary that much from one month to another.
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I also think doing it monthly will be judicious. And it also helps in decision making
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It's good for your organization to prepare a cash inflow and outflow budget to track on the development of your organization with regards to your strength and wickness and it will help you know where you should impr
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For my organization, it should be judicious to create a cashflow budget every three months. it is easy for the members/participants to pay for their contributions which are for us a big part of our cash inflows. The main part of cash outflows is the compensation paid to the volunteers.
It is important to have a well knowledge of your both, cash inflow and out flows in order to manage the sustainability of your organization. -
Monthly cash flow forecasts in line with monthly budgeting cycles to mitigate any changes in income/sales and expenditure forecasts
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We have a cash flow for next three months on weekly basis in place and monitoring the same by every week. Estimation of revenue and expenditures for three months are from the project managers of the particular project. This made us to collect the payments from the customer and to service providers / suppliers in time.
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Monthly cash flow forecasts in line with monthly budgeting cycles to mitigate any changes in income/sales and expenditure forecasts
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In cash flow budget preparation one has to calculate cash receivables and cash expenditure that would take place in a fixed/ certain time period. However, keeping a proper track with project budgeting is equally important and hence, cash flow budgets are prepared monthly and in some countries even weekly. This would help to have some reflective ideas about effective implementation of budget in projects.
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In cash flow budget preparation one has to calculate cash receivables and cash expenditure that would take place in a fixed/ certain time period. However, keeping a proper track with project budgeting is equally important and hence, cash flow budgets are prepared monthly and in some countries even weekly. This would help to have some reflective ideas about effective implementation of budget in projects.
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Our cash flow is created every three months just to keep track of it.
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In our organization we calculate the cash flow every month to keep track of expenditures and incomes monthly
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The Cash flow budget is being created every week in my Institution, this is because we needed to track cash in and cash out every week.
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Having a standardized system creates more organization for the budget. In addition, having all components of the budget within one system also allows you to see the project components, where they overlap and where possible gaps are within your programming. The organization would gain a more streamlined project view from the budget and a cohesive budget to see where possible budget "leaks" are.
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My organization creates a cash budget every three months because we don't have a lot of activity.
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1 Reply
We create our cash flow every two months to see where we are in terms of the funds.
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I think I will go with the monthly basis. This enables organization to track inflows regularly and ensure that funds are available to attend to the cash outflows for the particular accounting period.
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In our organisation we check the cash flow on monthly basis. This helps to control the inflow cash and expected expenses(Outflow cash)as the organisation should have enough cash flow (remaining cash) every month.
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1 Reply
Cash flow budget should be prepared every three months, part of the reason is because general financial and economic statistics are presented quarterly. This helps in understanding inflation rates and other economic indicators. It also saves the stress of doing so monthly and the avoidance of so much inconsistencies.
