CASH-FLOW BUDGETING AND AVOIDING RISKS WITHIN COMPANIES

Abstract

There are two major accounting systems worldwide at the moment. One of them is the accrual accounting, defined by gaps between recognizing the expenses and the moment of payment and, also, between recognizing the income and the moment of cashing. The second one is the accounting, defined by the lack of the mentioned above. Thus, if within a cash accounting a expense-income budget is identical with a payment-cashing budget, within an accrual accounting, they are different, the fair image of the company’s activity being revealed in a much more appropriate way by the cash-flows budget, avoiding, in this way, various risks. The present paper aims to emphasize, especially in a practical way the steps needed to be followed in order to elaborate, within an accrual accounting as Romania has, a cash-flows budget in a very accurate manner. These steps involve: establishing objectives and activities for the future activity, selecting the suppliers, determining the optimal amount of stock, calculating the expenses involving the HR, setting the selling prices, evaluating the risks.