Budgets vs. Forecasts vs. Projections

 

They’re not the same. And you probably need them all.

Here’s what you need to know:

🎯 The Budget:

- Aligns spending plans with revenue generation and strategic objectives.
- Sets the baseline for performance metrics.
- Serves as a control mechanism for effective cost management.

🎯 The Forecast:

- Acts as a navigational tool for short/mid-term financial performance.
- Integrates real-time market feedback for dynamic strategy adjustments.
- Identifies early warning signs and opportunities for proactive measures.

The Rolling forecast

- Extends the forecast to provide a 12-month forward-looking perspective.
- Is dynamic, recalibrating predictions as new data and trends emerge
- Facilitates a more agile response to market changes, competitor actions.

🎯 The Projections:

- Encourage long-range thinking and future scenario planning.
- Inform stakeholders of potential growth trajectories and risks.
- Drive policy and strategic decisions at the highest organizational levels.

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