What is Cash Budget?
A cash budget is a forecast of expected cash inflows and outflows over a period, showing the projected ending cash balance. It is used to manage liquidity and plan financing needs.
How It Works
- Forecast collections from customers and other inflows.
- Forecast disbursements (payroll, suppliers, tax, capex).
- Compute monthly cash position and identify gaps.
Saudi Context
Saudi SMEs build monthly cash budgets aligned with WPS payroll cycles, monthly or quarterly VAT remittance, and Zakat/CIT advance payments.
Example
A Riyadh contractor projects SAR 8 million inflows and SAR 9 million outflows in March, so it secures a SAR 1.5 million short-term facility before month-end.