How to draft a liquidity budget
- KVK Editors
- Step-by-step plan
- Edited 15 August 2025
- 3 min
- Managing and growing
- Finance
A liquidity budget is an overview of all expected income and expenditure in a given period. It shows you when money comes in and when it goes out. It helps you plan whether you will always have enough money to pay your bills on time.
What is a liquidity budget?
With a liquidity budget, you track your business's money. You calculate how much money is in your bank account after income and expenses. This shows you whether there is always enough money to pay the bills. You will also know if you need extra money in certain months.
It also helps you choose the right moment for a new investment, for example. The liquidity budget is an important part of your financial plan, for yourself and for financiers.
Difference between a liquidity budget and an operating budget
A liquidity budget shows your income and expenses per month or per quarter. It gives insight into the availability of money. Is there enough in the bank account at the end of each period to make your payments? The amounts in a liquidity budget include VAT.
In an operating budget, you budget amounts per year. It gives insight into the expected profit or loss. In the operating budget, the amounts are exclusive of VAT.
How do you draw up a liquidity budget?Â
Follow these 4 steps to draw up your liquidity budget:
1. Opening balance
Determine the opening balance as of the 1st of the month.
2. Income and expenses
List the income and expenses you expect in the following months.
3. Surplus or shortage
Determine whether there is a surplus or a shortage in a given month. Example: you employ staff. You have to pay their holiday allowance in May. In the liquidity budget, you set aside sufficient money for these expenses in May. You also ensure that you have sufficient money for the other expenses in that month.
4. Additional financing
Do you see a shortage in a certain month? Then take action in time and arrange additional financing as soon as possible. For example, you can request extra working capital.
Example of a liquidity budget
|
Amount in euros |
Month 1 |
Month 2 |
Month 3 |
|---|---|---|---|
|
 |
Amount in euros |
 |
 |
|
Bank balance beginning of month |
10.000 |
12.000 |
13.200 |
|
Plus: Customer payments received |
8.000 |
7.000 |
8.500 |
|
Minus: Payments to suppliers |
1.000 |
800 |
1.200 |
|
      Rent |
1.000 |
1.000 |
1.000 |
|
      Wages |
2.000 |
2.000 |
2.000 |
|
      Private withdrawal |
2.000 |
2.000 |
2.000 |
|
      VAT payable |
0 |
0 |
4.500 |
|
Receipts minus expenses |
2.000 |
1.200 |
-2.200 |
|
Bank balance end of month |
12.000 |
13.200 |
11.000 |
Video: Make a financial plan
Tips for making a liquidity budget
- Take your customers' payment terms into account. On average, private individuals in the Netherlands pay after 30 days. Companies usually pay between 30 and 90 days.
- Take holidays into account: if your company closes during the holiday period, you will not receive any new assignments during that period. That means you will have less income the following period.
- It is not always possible to delay payments. Some payments must be made at fixed moments, for example, taxes, rent, telephone costs, and wages.Â
- State VAT in a separate column. Take into account the VAT return you need to file and pay. Most businesses file a VAT return every 3 months over the previous quarter. In the following month, you pay the due amount of VAT to the Tax Administration. There is a chance that you pay VAT before you have received the money from your customer. For instance, if you have sent the invoice in February, filed your VAT return in March, paid the VAT in April, and receive payment in May.
Ask for help
Do you need help drawing up your liquidity budget? You can hire a bookkeeper or accountant via  (in Dutch) or NBA.
