Manual Budgeting and Forecasting and Its Disadvantages

  • Linda Nguyen University of Economics - Technology for Industries, Vietnam
  • John Lee University of Economics - Technology for Industries, Vietnam
Keywords: budgeting, financial, incomplete, estimated

Abstract

A financial forecast is a budgeting tool that shows estimated statistics based on past, present, and future financial conditions. Without a prediction, the annual budgeting process is incomplete. A strong forecast allows for improved financial decision-making and the delivery of important community services. The fundamental difference between a budget and a forecast is that a budget outlines a company's plan for achieving its goals, but a forecast outlines the company's actual results expectations, usually in a much more concise manner. In actuality, the prediction is the more important of the two tools because it provides a short-term snapshot of a company's current situation. Monthly, quarterly, or weekly rolling forecasts are used to help you plan for a specific time period that isn't covered by the yearly budget, such as the next five quarters. As a result, most rolling predictions will forecast the next 12 months or more, rather than just the fiscal year's end. Once a fiscal month or quarter has been actualized, your prediction simply "rolls" over to the next period, ensuring that you never lose sight of your long-term business trajectory.

References

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Published
2021-01-31
How to Cite
Linda Nguyen, & John Lee. (2021). Manual Budgeting and Forecasting and Its Disadvantages. International Journal on Economics, Finance and Sustainable Development, 3(1), 47-51. Retrieved from https://journals.researchparks.org/index.php/IJEFSD/article/view/2138
Section
Articles