CASH FLOW BUDGETING PROCESS

3 simple steps of budgeting:

1. Find a suitable tool
2. Set goal & time frame
3. Forecasts:
4. Sales
5. Cash Inflow
6. Cash Outflow

IMPORTANT NOTE:

1. MUST always monitor (if a business is preparing a budget).
2. Actual vs Budget, variance analysis, action plan

 If you don’t monitor or take any plans to do variance analysis, you might as well don’t do budgeting at well as it will be a waste of time.