Budgeting vs. Forecasting – What’s the Difference?
May 11, 2021
VIDEO — What’s the difference between budgeting and forecasting? Sometimes these terms are used interchangeably but each means something different.
The following is an overview of the differences highlighted in the video —
Budgeting:
- Has a goal-driven plan
- Is static with minimal revisions
- Focuses on 1 to 3 year time period
- Has versions – Worst Case, Nominal Case, Best Case
Forecasting:
- Provides more targeted and tactical planning
- Uses strategic budget as starting point
- Has a duration less than 1 year
- Uses a rolling forecast as periods close
- Identifies gaps within the budget
Automation improves control over forecasting and budgeting. A plan for corporate spending has little chance of success without a way to control expenses. Budgetary control software that is integrated with some financial planning and control solutions automatically check for budget availability before a purchase is committed, eliminating the possibility of budget overruns. All this delivers the visibility businesses need to better manage their cash and spending.
If your business wants to improve its forecasting and budgeting, listen to PyanGo’s latest Budget Bites, “Budgeting vs. Forecasting – What’s the Difference”
