Managing A Company's Cash Flow: The Case of Sonelec (Comoros)

Abstract

The cash flow budget reflects all of the company's budgets (operating budget, investment budget and the financing budget) translated into terms of cash receipts and disbursements, and allows for the transformation of accounting flows (income and expenses from the income statement) into cash flows (cash disbursements and receipts).

The cash flow budget is the document which, in the company, lists the cash inflow and outflow forecasts over a given period (usually the year) in order to evaluate the cash position at regular intervals (the month)..

The cash flow budget aims to present the various movements of funds, not only in volume, but also in terms of payment and collection dates within the proposed time frame. The monthly breakdown makes it possible to regularly monitor the company's cash flow and to measure cash requirements.

We can therefore say that the cash flow budget is a forecast of the cash receipts and disbursements expected by a company during the following year and that it is a short-term financial planning tool.