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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.
1 The budget is a detailed representation of the future results, financial position, and cash flows that management wants the business to achieve during a certain period of time. 2  The budget may only be updated once a year, depending on how frequently senior management wants to revise information.