QUESTION 66
WHAT’S THE DIFFERENCE BETWEEN A BUDGET AND A FORECAST?
Why it’s important: As a manager you are almost certainly going to be responsible for managing a budget.
A budget is used to manage and control an organisation’s income and expenditure over a stated period (usually one year). A forecast is a prediction of the organisation’s position at some point in the future.
A BUDGET:
If well prepared, should be a costed version of an organisation’s operational plan (see Question 60). It can be seen as an operational plan with a price ticket on it.
Is prepared internally by the organisation’s staff.
Is used to monitor and control the organisation’s income, expenditure and investment over a period of one year.
A FINANCIAL FORECAST:
Is a prediction ...
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