Budgeting and forecasting are two words that closely related. Some people think that both meant the same thing.
However, these two words really meant differently especially in the financial business world. If you are a finance person, you must know the definition of these two words or else you could faced problems dealing with your works.
Budgeting is usually an a process of setting future financial targets of the companies. The targets are usually set for the next twelve months. The finished product is called a Financial Budget. To support the Financial Budget, the companies would prepare action plans and strategies to guide them to achieve their targets within the stipulated periods.
Forecasting is a process of projecting the future financial results of the companies. Companies would made a projection of the future financial performance based on their current and previous financial results.
I hope I gave you a clear description of what is budgeting and forecasting.
