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17336817
Cash Budgeting
Description
Cash Budgeting for National 5 Business Management
No tags specified
cash budget
cash flow
nat 5 finance
highers
Mind Map by
Mrs Ritchie
, updated more than 1 year ago
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Created by
Mrs Ritchie
over 5 years ago
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Resource summary
Cash Budgeting
Businesses need cash
To pay wages
No workers means nothing produced
To buy stock
No stock means nothing to sell
To pay fixed costs
Mortgage
Rent
Electricity
Taxes
Cash Flow Problems
Too much money tied up in stock
Owner takes out too much money
Customers take too long to pay
Purchasing fixed assets
Increase in costs/expenses
Not enough sales
To resolve Cash Flow Problems
Offer discount for prompt payment
Offer discount to customers
Sell any unused assets
Arrange an overdraft/loan
Cut costs
Reduce waste
Interpreting a Cash Budget
Look for trends in Sales - going down
Look for trends in Purchases - going up
Look for trends in wages - going up
Look for large items of expenditure eg vehicles/machinery
Look for decreasing monthly balance
Look for decreasing total income
Benefits of cash budgets
To see if there's excess cash
To help decision making
To show if extra finance is required
To help control expenses
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