What is budgeting and forecasting

Question

Accepted Answer

Budgeting and forecasting involve planning and estimating financial outcomes for a specific period of time.

Budgeting is the process of creating a detailed plan for how to allocate resources and expenses for a specific period of time.
Forecasting involves predicting future financial outcomes based on historical data, market trends, and other relevant factors.
Budgeting helps organizations set financial goals and allocate resources effectively, while forecasting helps them anticipate potential challenges and opportunities.
Examples: Creating an annual budget for a company's operating expenses, forecasting sales revenue for the next quarter based on market trends.