Budget / Forecast / Data Modelling
A Budget is a quantified expectation of what a business wants to achieve.
- It is compared to actual results to determine variances from expected performance.
- Management takes remedial steps to bring actual results back in line with the budget.
- It may generally be updated once a year.
A Forecast is an estimate of what will actually be achieved.
- It is updated at regular intervals (monthly or quarterly).
- A forecast is used for short-term considerations, like adjustments to staffing, inventory or production plan.
- There is no variance analysis that compares the forecast to actual results.