All 34 Cash Budgeting questions
More in Cash Budgeting
What is a cash surplus and cash deficit in the context of a cash budget? How do you calculate cash receipts from credit sales? How do you calculate cash payments to suppliers? How is a cash budget structured/formatted? What can management do with a forecast cash surplus? How does the cash budget link to working capital management? How do capital expenditure and financing appear in the cash budget? How do bad debts affect cash receipts in the cash budget? How are settlement discounts reflected in the cash budget? How does a cash budget help decide on financing arrangements?
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Budgeting & Forecasting › Cash Budgeting

What actions can management take if the cash budget shows a shortfall?

Intermediate

Answer

Options include arranging an overdraft or short-term loan, accelerating receipts (tighter credit terms, early-payment discounts, factoring), delaying non-essential payments or capex, negotiating longer supplier terms, reducing inventory, deferring dividends, or injecting capital. The cash budget's value is giving time to act before the shortfall bites.
Real-world example Seeing a month-3 shortfall, the firm arranges an overdraft and delays a planned equipment purchase.

Common follow-ups: How can receipts be accelerated? | Why is early warning valuable?

Rolling Forecasts Capital Budgeting Cash Budgeting
All 34 Cash Budgeting questions