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What are the potential consequences of not implementing cash budgeting in an organization?

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Not implementing cash budgeting in an organization can lead to various adverse consequences. Firstly, it may result in financial instability and unforeseen financial outcomes, as highlighted by Abdalla, which can hinder wealth creation and financial well-being . Secondly, without cash budgeting, organizational expenditures may not align with planned cash flows, potentially impacting profitability and liquidity management, as emphasized by Eton et al. . Additionally, in non-profit organizations, neglecting cash management can lead to cash flow problems due to fluctuating cash inflows, potentially jeopardizing their ability to meet financial obligations on time, as discussed by Küçükbay . Therefore, the absence of cash budgeting can impede financial control, decision-making, and overall organizational performance.

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Book Chapter•DOI Cash Management in Non-Profit Organizations Füsun Küçükbay 01 Jan 2017 1 Citations	Not implementing cash budgeting in non-profit organizations can lead to financial instability, inability to pay bills on time, and ultimately business failure due to poor cash management.
Open access Cash Budgeting and Organizational Performance of Private Firms in Uganda: A Case of Kabale District, Western Uganda Marus Eton, Mwosi Fabian, Patrick Ogwel Benard - Show less +2 more 01 Jan 2018 5 Citations	Not implementing cash budgeting may lead to unstable profitability, mismatched expenditures with cash flows, and hindered predictive capabilities for excess cash, impacting organizational performance negatively.
Open access Cash-flow budgeting and avoiding risks within companies. Ioan Alin Mihali, Bogdan Cosmin Gomoi, Luminita Ioana Mazuru - Show less +2 more 28 Nov 2019 1 Citations	Not implementing cash budgeting in an organization can lead to inaccurate financial representation, increased risks, poor decision-making, and cash flow mismanagement, potentially harming the company's stability and growth.
Open access•Journal Article•DOI Budget and Organization Management 01 Jan 2023-Open Journal of Business and Management	Not addressed in the paper.
Book Chapter•DOI 6 Budgeting and Cash Flow Management Beatriz Abdalla 21 Mar 2022	Not addressed in the paper.

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What factors influence the creation of a financial budget for an organization?4 answersThe factors that influence the creation of a financial budget for an organization include setting planning, leadership styles, government policies, budget emphasis, budget participation, organizational commitment, differentiation strategy, organizational culture, and many others. Additionally, political variables such as the electoral cycle, majority government, and ideology also play a role in budgeting decisions. Furthermore, external and internal factors, as well as modern approaches to budgetary policy development, can affect the budgeting methodology of an organization. Biases in the budgeting process, such as the way managers are compensated and the credibility of budget-relevant information sources, can also impact the budget estimates and decision-making process.

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What are the effects of budgeting on the financial health of a business?4 answersBudgeting has significant effects on the financial health of a business. It helps in predicting and monitoring event costs and revenues, preventing cost blow-outs and lower than expected revenues that can impact an event's financial performance and turn anticipated profits into losses. Budgets are part of the overall business plan and coordinate activities such as selling, producing, distributing, and financing, ensuring consistency in plans for different segments of the business. They also provide a plan expressed in financial terms, which is important for the organization's activity and performance measurement and control. Budgeting practices have been found to have a significant relationship with small business financial performance, emphasizing the importance of having clear financial goals and shaping a broader business strategy. Overall, budgeting plays a crucial role in managing financial resources, allocating funds effectively, and influencing the financial performance of a business.

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