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Understanding Cash Budgets. A cash budget is used to estimate the cash inflows and cash outflows anticipated by a company over a period of time. Budgets are often looked at over a 1-month, 3-month or 12-month time period.
A budget is a guide to spending that ensures all expenses will be paid on time, given there aren't any significant changes. Even if changes occur, a budget comes to the rescue because saving for emergencies should be part of every budget. Think of a budget as a moving picture which takes place over time.