What is the difference between a budget and a cashflow forecast?

A budget is normally shown for a full year (or specified period) and shows all the relevant income and expenditure for the period; it does not show the bank or cash movement separately.  However, a cashflow forecast does show the anticipated cash in and out (or receipts and payments) and is usually splits the transactions into monthly columns.  A budget is used to plan ahead for the organisation or a project, whereas the cashflow forecast is used to manage cash tightly eg. to ensure the bank account is not overdrawn.

Posted in: Planning & Budgets

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