Difference between Forecasting and Budgeting

Question

Accepted Answer

Forecasting is predicting future outcomes based on past data while budgeting is setting financial goals for the future.

Forecasting uses historical data to predict future outcomes while budgeting sets financial goals for the future.
Forecasting is more flexible and can be adjusted based on new information while budgeting is more rigid and sets specific targets.
Forecasting is typically done on a regular basis while budgeting is done annually or quarterly.
Forecasting is used to anticipate changes in the market or industry while budgeting is used to allocate resources and plan for expenses.
Examples of forecasting include predicting sales for the upcoming quarter or estimating future expenses based on past trends.
Examples of budgeting include setting a target revenue goal for the year or allocating funds for specific projects.

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