Budget vs Forecast, simple explanation.

It’s that time of year where everyone is looking to put together a “budget”. But what about a forecast?
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So what’s the difference between a budget and a forecast anyway?
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Really not a lot. Simple way of thinking of it is like this.
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A Budget is where management would like to see the future based on expectations.
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A Forecast is like a temperature check on how we’re doing as a company in reaching those expectations.
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What does that mean…..
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Budget is “Here are Mgmt.’s our goals.”
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Forecast asks the question…”Will Mgmt. meet those goals?”
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Now that’s HUGE!!