ABSTRACT
This chapter examines the principles and practices of cash forecasting and the steps which a business needs to take to ensure short-term liquidity. The subject increases in importance as business, and the society in which it operates, becomes more complex, especially with the development of ‘plastic money’ and cashless transfers of funds. Cash budgeting can be viewed as an element in the construction of the working capital budget which, as with so many other aspects of the financial controller’s work, is an exercise which lends itself to the use of computerized financial models by which means there can be several iterations of the initial view, reflecting changed assumptions in each and every aspect of the budget. Most companies have income not immediately associated with their normal course of trade and this will include income from investments and rental income from property.
