What is the difference of Forecasting & Budgeting?

forcasting is the base for any budget 

Budget is based on planned event and forecasting based on estimation

Budget is made for one year but forecasting is made for long period

In essence, a budget is a quantified expectation for what a business wants to achieve. Its characteristics are:

• The budget is a detailed representation of the future results, financial position, and cash flows that management wants the business to achieve during a certain period of time.
• The budget may only be updated once a year, depending on how frequently senior management wants to revise information.
• The budget is compared to actual results to determine variances from expected performance.
• Management takes remedial steps to bring actual results back into line with the budget.
• The budget to actual comparison can trigger changes in performance-based compensation paid to employees.

Conversely, a forecast is an estimate of what will actually be achieved. Its characteristics are:

• The forecast is typically limited to major revenue and expense line items. There is usually no forecast for financial position, though cash flows may be forecast.
• The forecast is updated at regular intervals, perhaps monthly or quarterly.
• The forecast may be used for short-term operational considerations, such as adjustments to staffing, inventory levels, and the production plan.
• There is no variance analysis that compares the forecast to actual results.
• Changes in the forecast do not impact performance-based compensation paid to employees.

A budget is a quantitative expression of a management plans for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. It expresses strategic plans of business units, organizations, activities or events in measurable terms.

Budgets are prepared normally to;

• To control resources
• To communicate plans to various responsibility center managers.
• To motivate managers to strive to achieve budget goals.
• To evaluate the performance of managers
• To provide visibility into the company's performance
• For accountability

Forecasting

The use of historic data to determine the direction of future trends. Forecasting is used by companies to determine how to allocate their budgets for an upcoming period of time. This is typically based on demand for the goods and services it offers, compared to the cost of producing them. Investors utilize forecasting to determine if events affecting a company, such as sales expectations, will increase or decrease the price of shares in that company. Forecasting also provides an important benchmark for firms which have a long-term perspective of operations.

Budget is a short term quantified financial plan for the forthcoming financial period and prepared before the beginning of the accounting period and it is used for accountability purposes. on the other hand, forecasting is a general method for the future estimation of variables and for short and long term periods for financial and non financial purposes.      

In simple words Forecasting is a tool that use to measure what is going to happen,How to done?

Or Budgeting is a tool used to calculate what is happened..what we have done?

Forcasting is just the prediction of Sales and Revenue with the help of historic figures. Whereas budgeting is the allocation of funds to sectors.

Forecasting IS JUST LIKE A VISION STATEMENT THAT WHAT IS OUR GOAL AND WHAT IS TO ACHIEVE IN THE FUTURE AND THE MOST IMPORTANT THING IS HOW TO ACHIEVE THAT GOAL THAT INVOLVES YOUR MANAGEMENT ALLOCATION.

BUDGETING ALSO INVOLVES THE FUTURE PLANS FOR THE NEAR FUTURE BASED ON THE PREVIOUS ESTIMATIONS AND EXPERIENCES DEPENDING ON THE ALLOCATION OF FINANCIALS DEPENDING ON THE IMPORTANCE OF ACTIVITIES.

Forecasting is the process of making predictions of events waiting to occur 

Budget: is expected  Balance sheet for the company activities in the  future for estimated period  be based on forecasting

@manaf almas  agree

Intended to predict the future is to look at the list and to predict the financial Mihaeh what should be a promising budgets, which in turn ends Baeidadad Financial Statements 

The budget is the financial statements relating to a financial period to come, and in other words, is the financial plan for the period following the estimated Usually the Year