If it ain’t broke, don’t fix it
There is a saying, “If it ain’t broke, don’t fix it.” In view of the firm’s present success in paying bills promptly, should it be encouraged to use a cash budget? Be prepared to support your answer.
When it comes to business, I am slowly learning that there are a thousand ways to skin a cat and be successful but in regards to the question I feel like the business should be open to using a cash budget. Reason being is that having a cash budget will help the business estimate how much income your business will take during the months, as well as how much the business will pay in expenses (Conrad, n.d.). Additionally, taxes at the end of the year will be easier due to the fact that all the income and expenses will be a lot more organized.
The company should continue to use a cash budget. However, it must start tracking its cash flow. Whether this task is contracted out or a person is hired on to do it, tracking the cash flow will give the company a better picture on how it is operating. This can and should drive efficiency and cut down on waste which both lead to being more profitable.