Cash flow budget

Drawing up BDDS is a direction that becomes today a priority in the management of any company. The periodicity of construction can be completely different. The cash flow budget, as a rule, is formed for the year, broken down by months. It should be taken into account that it is considered to be the most variable and flexible in the process of the performed activity part of the accounting forms. In this regard, a large distribution in practice has acquired a monthly budget for the movement of funds, broken down by day and date. Compilation and approval of it is carried out every month, three or five days before its completion. In the process, all structures and departments whose activities are in touch with planning and determining the directions in accordance with which the money (finance) is spent, should take part.

Finance refers to a category of assets that has the highest level of liquidity. This degree allows the company to have the greatest freedom of choice during the economic activity.

According to the traditional opinion, effective management of cases at the enterprise is possible with a positive balance of cash. However, in practice this situation is ideal. Professionally, competently planned items of cash flow allow you to fulfill the tasks of effective management of the company. Very often, many experts assign the main place to this procedure.

As the world practice shows, special attention is paid to the methods by which the budget of cash flows is studied and forecasted. This is mainly due to the "irregularity" of payments and receipts that arise during the course of business, which can provoke unforeseen various circumstances. They, in turn, negatively affect the liquidity of the company. Often it is the cash deficit that is the first indicator of the crisis situation in the company.

In different countries with developed economies, the cash flow budget acts as the initial data used in analyzing the financial state of the organization.

The flow of production begins and ends the production and commercial cycle in any enterprise. The company's activity, according to one of its concepts, is profit-oriented. But in the end, income is not money. More important is the resulting financial flow. On its basis, a new production cycle begins and, with its help, resources are redistributed.

Effective money management is possible with knowledge of its magnitude and structure. There are two main directions in the management of the company's financial flows:

1. Analysis. At this stage, the cash flow is optimized.
2. Forecasting. In this direction, cash outages are eliminated.

Analysis of financial flows should result in an exhaustive information on the amount and sources of funds, the ability of the company to ensure a surplus of the budget in the course of its current activities , as well as the reasons for the discrepancy between the amount of income received and the balance of funds.

Forecasting has a special place in the process of managing financial flows. Often the construction of special budgetary forms arises in case of need in lending or the search for investments, that is, under the influence of external factors.

Specialists note that these directions are considered priority, but not exhaustive.

Informative budget of financial flows is possible when covering all areas of cash flow.