This page describes budgets and forecasts and summarizes their differences. This information is useful to new users of the Budgets and Forecasts module, whether you’re a budget owner managing the budgeting and forecasting process or a contributor to the budget and forecast workflow.
Budget
A budget quantifies expected performance and provides a detailed representation of the business's future goals. It is updated once a year. If adjustments are required during the year, the budget transitions into a forecast. Budgets allow businesses to measure performance by comparing their budget values to actual results.
Budgets & Forecasts integrates the budget and actual data in one place, allowing you to easily see how your business is trending against the budget.
Forecast
A forecast combines the actual results from past months with projected values for the remaining period. It is regularly updated throughout the year. Forecasts are forward-looking, allowing businesses to estimate sales or profit for future periods and understand their current direction.
Budgets & Forecasts allows you to convert a budget into a forecast to adjust for market conditions and more accurately predict future results.
Budget versus Forecast
Whereas the budget reflects where the company plans to go, the forecast reflects where the company is actually heading.