What is a cash flow budget?

A man sitting at a table in an office writes out a cash flow budget on a piece of paper clipped to a clipboard.

Need to learn how to build a cash flow budget but not sure where to start? Your business needs consistent cash flow to maintain operations. Learn how to build a cash flow budget PDF to help you monitor your business’s financial health.

Cash flow budgeting 101.

A cash flow budget estimates your business’s cash flow over a specific time period. You can use the information to see if you have enough cash coming in to maintain regular operations over the given time frame.

It can also give insight into how to allocate your budget effectively. If you end up with a surplus at the end of the period, you can reallocate that money to exploring new opportunities or expanding your business.

Who needs a cash flow budget?

A cash flow budget is beneficial when running a business. For both personal and business matters, it can help you see your income and the expenses you have throughout the year to ensure you have enough money to pay for necessary expenses — and still have extra savings.

How to create effective cash flow budgeting for your business.

You may be wondering where to start with creating cash flow budgets. It’s not easy to estimate cash flow off the top of your head, so build a cash flow budget. It’s all about managing your income and expenses over your chosen time period.

Follow these steps to build your cash flow budget:

  1. Determine your time frame (weekly, monthly, quarterly, annually, etc.)
  2. Estimate your total income over the period. Break it down by source and payment timing.
  3. Estimate your total expenses over the period, broken down by source and timing.
  4. Subtract your total expenses from total income to determine surplus or deficit over the time frame.

Hopefully, you’ll end up with a surplus at the end of the period. That means your business has extra cash on hand that you can use to grow. If your cash flow budget shows a deficit, you know it’s time to find other avenues of income or cut some of your expenses.

To stay organized, create a spreadsheet that can keep track of income and expenses over time. Then, convert the Excel spreadsheet to a PDF to simplify sharing and collaboration with your team. You can also work with PDFs online to make managing your cash flow budgets even easier.

Examples of cash flow budget categories.

There are a variety of subcategories you should include on your list of cash flow budget categories. There are a few main categories that each of your expenses will fall into:

  1. Beginning weekly balance. This is the total balance of your cash, prepaid card, and additional account balances at the start of the week.
  2. Money you receive each week. This is your income from your job and any other outlets. You will add this up on your cash flow budget sheet.
  3. Weekly expenses. This is everything you spend money on during the week — your cell phone bill, health expenses, transportation, and so on. Subtract these from your balance on your cash flow budget sheet.
  4. Ending weekly balance. This is the amount of money you have at the end of the week after adding the money you received and then subtracting weekly expenses.

Importance of all departments using a cash flow budget.

When running any business, it is important to ensure all employees are on the same page to create the best products and services and keep productivity up. For a large business with multiple departments, getting everyone on board with the same cash flow system will make budgeting easier.

A cash flow budget is a helpful tool for businesses because it:

Tips on managing your cash flow budgets.

Cash flow budgets are a great tool to help you save and build profit. Here are some tips to help you manage these cash flow budgets:

Is a cash flow budget different from a regular budget?

A cash flow budget displays how much income you have left after accounting for all your expenses. By contrast, a budget predicts how cash will be allocated and records how the finances were actually spent at the end of the month.

Tools to track and organize a cash flow budget.

There are many ways you can organize and track your cash flow budget. There are financial software solutions that can organize your finances for you, such as You Need a Budget or Mint. Notion is another platform that can be used to manage finances and other projects as well. If you prefer to manually organize and edit your finances as needed, you can turn to Google Sheets or Excel to figure out your budget or Adobe Acrobat to digitize, organize, and share receipts or financial documents.

More resources on budgeting.

After you learn how to create a cash flow budget, consider diving into the resources below:

Discover more about how Adobe Acrobat can simplify managing your business budget.