Financial forecasts and budgets are the two main planning tools in modern organizations. If used correctly, financial forecasting and budgeting ensure that an organization always has enough money for the things that are most important to their short-term and long-term success.
Unfortunately, the two terms are often confused or even used interchangeably. This fluctuation is a mistake. While forecasting and budgeting are both critical to an organization’s planning process, the two differ significantly.