Cash and profit
Explain why profit and cash differ and recognise the different types of cash receipts and payments.
AAT Level 4 · CSFT
Cash and Financial Management
Forecast cash flows, prepare and monitor cash budgets and understand how organisations raise finance and invest surplus funds.
Unit overview
Understand the method, not just the answer.
Q2022 unit supportThis page supports the AAT Level 4 Diploma in Professional Accounting (Q2022). Check that this is the qualification route shown in your MyAAT account or by your training provider.
CSFT is about keeping an organisation solvent. Learners forecast receipts and payments, build cash budgets, explain differences between budgeted and actual cash, and recommend suitable ways to borrow when cash is short or invest when there is a surplus.
Use this page as a starting point for your revision. Work through the topic areas, identify where confidence is lowest and combine independent practice with the linked downloads and free sessions.
Key topics
What to focus on in CSFT.
These topic summaries provide a revision map rather than a replacement for the current AAT specification and your training-provider materials.
Forecasting techniques
Use time series, moving averages and index numbers to forecast future income and costs.
Cash budgets
Prepare cash budgets that reflect credit terms, payment patterns and the timing of receipts and payments.
Monitoring cash flows
Compare actual cash flows with the budget, explain the variances and suggest corrective action.
Liquidity and the financial environment
Understand how the banking system, monetary policy and regulation affect an organisation’s liquidity.
Raising finance and investing surplus funds
Compare borrowing options and investment choices by weighing cost, risk, return and liquidity.
How to revise this unit
- 1Set out cash budgets in a consistent layout: receipts, payments, net cash flow, then opening and closing balances.
- 2Practise converting sales and purchases into cash using the payment pattern given in the scenario.
- 3Learn the features of each finance and investment option so you can compare them quickly.
- 4When explaining a variance, give the cause and a practical action rather than just the number.
Common pitfalls
- !Including non-cash items such as depreciation in a cash budget.
- !Putting receipts and payments in the wrong month when credit terms apply.
- !Recommending an investment without considering the organisation’s need for liquidity and its attitude to risk.
Free revision posters
Revision posters for CSFT.
Posters published for this unit appear here automatically. Open a poster to view it online or download the PDF for personal study.
Learn live
Upcoming sessions for CSFT.
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ExamReady
CSFT practice questions and a timed mock, from 27 October.
This is independent revision support and is not produced, endorsed or approved by AAT. Always check the current AAT specification, assessment information and your training-provider guidance.