The major differences between budget and forecast are as follows −
It’s a business plan made by management for future with quantitative.
It shows what a company want to achieve during a period of time.
Generally, it is short term.
It is static in nature.
It is used as tool to manage operational performance in short term.
It sets the targets.
It is updated annually.
There is variance analysis.
Covers large areas like costs, revenue, profits etc.
Almost everyone will aware of budget.
It is based on historical data; future trends can be estimated.
It tells about what a company will achieve in a specified period.
Generally, it is long term.
It is more flexible.
It is used as input for preparing budget.
It has no targets.
It is updated at regular intervals of time.
There is no variance analysis.
It is very narrow and covers only revenue and expenses.
Only management and team leaders will be aware of forecast.