Budgeting & Forecasting › Cash Budgeting

What is a cash surplus and cash deficit in the context of a cash budget?

Beginner

Answer

A cash surplus is when projected receipts exceed payments, raising the closing balance (cash to invest or deploy); a cash deficit is when payments exceed receipts, lowering the balance (possibly below zero, needing finance). The cash budget highlights the months of each so action can be planned.
Real-world example The budget shows a surplus in busy months and a deficit in the quiet season needing overdraft cover.

Common follow-ups: What can you do with a surplus? | What does a deficit require?