What is difference between budget and forecasting?

Question

Accepted Answer

Budgeting involves planning and allocating resources for a specific period, while forecasting predicts future financial outcomes based on historical data and assumptions.

Budgeting is a proactive process that involves setting financial goals and allocating resources to achieve those goals.
Forecasting is a reactive process that uses historical data and assumptions to predict future financial outcomes.
Budgeting is typically done on an annual basis, while forecasting can be done on a monthly, quarterly, or annual basis.
Budgeting focuses on specific targets and objectives, while forecasting provides a range of possible outcomes.
Budgeting is more detailed and specific, while forecasting is more general and flexible.
Budgeting is used for planning and control purposes, while forecasting is used for decision-making and strategic planning.
Example: A company creates a budget at the beginning of the year to allocate funds for various departments and projects. Throughout the year, they use forecasting to predict sales, expenses, and cash flow based on market conditions and historical data.

Accepted Answer

Budgeting is a Plan or Goal where organization wants to go and forecast is an estimate of what the company will actually achieve if it keep performing as it is, usaully Budget prepare annually and forecasting do monthly or quarterly

What is difference between budget and forecasting?

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