Essay on FINANCIAL RESOURCES

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A budget is an estimate of income and outgoings over a set period of time, in the case of larger companies this will usually be over one year, smaller companies may determine a budget that outlines incomings and outgoings over an extended period, e.g they may define when particular assets will be purchased, and why this is
Cash flow forecasting or cash flow management is a key aspect of financial management of a business, planning its future cash requirements to avoid a crisis of liquidity. Why is cash flow forecasting important.
Identify potential shortfalls in cash balances in advance—think of the cash flow forecast as an "early warning system". This is, by far, the most important reason for a cash flow forecast.
Make sure that the business can afford to pay suppliers and employees. Suppliers who don't get paid will soon stop supplying the business; it is even worse if employees are not paid on time.
Spot problems with customer payments—preparing the forecast encourages the business to look at how quickly customers are paying their debts. Note—this is not really a problem for businesses (like retailers) that take most of their sales in cash/credit cards at the point of sale.
As an important discipline of financial planning—the cash flow forecast is an important management process, similar to preparing business budgets.
External stakeholders such as banks may require a regular forecast. Certainly, if the business has a bank loan, the bank will want to look at

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