What is Budget and Forecasting?

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There are two extremely important aspects of running a business in order for the business to succeed and operate at an efficient level. These two essential activities are Forecasting and Budgeting.

A Budget, or budgeting, is the managerial document in which the costs associated with running and keeping your business operating at a healthy level are estimated, expected revenues are projected, and then decisions are made which define how much debt you are in and thus how much you can borrow, your status regarding tax levies and how much you can afford to spend on new purchases, new employees or new ventures.

Forecasting provides information on how the market most likely will act over a given time in the future, or time series.

Next Page: Do Budgeting and Forecasting Work Together?

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