Even for successful and well-capitalized businesses, cash budgeting is important. It involves planning for the inflows of cash into the business so there is cash available to meet cash expenditures. Proper cash management allows for smooth, uninterrupted operation of the business. Poor cash management can result in costly business interruptions and delays. So making projections of cash flows into and out of the business should be constructed and monitored on a regular basis.

Understanding Cash Flow provides you with an introduction to cash management and why it is important for your business. Cash Flow Budgeting for a Value-Added Farm Business provides you with a description of how to construct a cash-flow budget for your farm. After you have developed your budget, Analyzing a Cash Flow Budget provides you with an understanding of the impact on your business.

For more information on this topic, see the links listed below of articles posted on related Web sites. Also see the worksheets and calculators available on Cash Flow Budgeting at the Business Workbench.

Cash Management

• Cash-Flow Projection for Operating Loan Determination – Kansas State University Extension.
• Worksheet: Cash Flow Projection for Operating Loan Determination – Kansas State University Extension – A short-run feasibility tool.
• Borrowing in a Risky Environment – Texas A & M University Extension – Farmers will be subject to a more performance based lending policy.
• Cash Management – Small Business Notes -- Cash is money that is easily accessible either in the bank or in the business.
• Managing Cash Shortages – Small Business Notes -- Cash flow shortages are a challenge for many small businesses.
• Short of Cash? Barter – Small Business Notes -- Every small business goes through periods when cash is tight.
• Accepting Cash and Credit – Small Business Notes -- What kind of identification can you ask customers to show when making purchases? How does the law regulate the acceptance of large sums of cash?

Cash Flow

• Cash Flow Budget – CCH Business -- A cash flow budget is a projection of your business's cash inflows and outflows over a certain period of time.
• Cash Flow Statement – Small Business Notes -- The cash flow statement is used to analyze the cash income and expenditures during a designated time period.
• Cash Flow Projections – Small Business Notes -- Sound financial management means knowing the cash flow for your business, forecasting your cash needs, planning your borrowing strategy so you have cash when you need it, and having financial records that show your payback ability.
• Best Ways to Prevent Overdue Accounts - AllBusiness.com -- These five steps can help your cash flow without endangering it.
• Financial Feasibility, Can You Afford to Do It - Agriculture, Food and Rural Development -- Inadequate cash flow is the most serious problem facing most new business ventures.

Cash Flow Calculators

• Cash Flow Calculator – CCH Financial Planning Toolkit – Having adequate cash flow is essential to keep your business running. Use this calculator to help you determine the cash flow generated by your business.
• Cash Flow Calculator - Bplans.com - This cash calculator shows you how business-to-business sales, carrying inventory, and rapid growth can absorb a business' money.
• Working Capital Needs – CCH Financial Planning Toolkit -- Working capital essential to running your business. This calculator assists you in determining your working capital needs for the next year.