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متابعة

Differentiate between a "Budget" and "Forecast".

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تاريخ النشر: 2014/09/17
khaled komber
من قبل khaled komber , Finance Manager , Royal Abjer For Trading And Contracting

Budgeting 

- is financial translation/expression of the Company's operational and strategic objective and plans 

- It's being done annually, in sometimes it's prepared for longer period in case of capital budgeting. 

- It starts withs sales and end with cash budget.

- Budget is used as planning and controlling tool. (Act. vs Bud.)

 

Forecasting

- you are building an anticipation based on assumptions to reach an estimation for a future event based on certain assumptions.

- Unlike budget, forecasting does not necessarily end with budgeted Balance sheet, income statement, cash flows. It could be a forecast for certain type of expenses or revenues.

Khaled Abdelrehim ACCA DipIFR CMA
من قبل Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

The forecast is a technique used to predict the future and it is used in preparing budget. So budget is prepared based on forecasts.

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