What is the difference between an operating budget and a cash budget?

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An operating budget is a financial plan that covers all the costs and expenses associated with running a business throughout its operations; this may include things such as payroll, rent, utilities etc. On the other hand, cash budgets are used to track and manage any outflows or inflows of money within company’s coffers for a given period – typically short term.

Operating budgets provide a comprehensive overview of how much money needs to be allocated in order to keep business up and running whereas cash budgets focus more on managing current assets and liabilities; this includes monitoring payments due from customers as well as amounts owed by vendors or banks.

Moreover operating budgets can also help predict future profits or losses since they factor in expected revenues alongside estimated expenditure requirements. Conversely cash budgets are mainly concerned with near-term financial performance i-e tracking account balances, calculating actual income/expenses over specific time frame etc.

In conclusion, while both types of budgets can aid executives make sound decisions they have distinct features that separate them from one another – operating ones tend to focus more on long term objectives while latter concentrates solely upon present day liquidity scenarios.