A budget is a target. A forecast is an expectation.

They answer different management questions. Keeping them separate lets a team see both the plan it adopted and what current information suggests.

The budget: what management chose

An annual budget records management’s adopted financial plan for a defined period. It can express targets for revenue, costs, staffing or departments. The approved revision remains the comparison point even when actual results or expectations change.

The forecast: what currently appears likely

A forecast uses supported actual records and explicit assumptions to project the operating outlook. It can change when source information or assumptions change. A forecast is not a commitment that results will occur.

KEEP THE QUESTIONS DISTINCT

Plan and expectation

BudgetManagement-adopted targetWhat did we plan to achieve?

ActualSupported source recordWhat has been recorded for the period?

ForecastCurrent assumptions and evidenceWhat do we now expect?

Why overwriting the budget causes trouble

If the budget is edited to match the latest expectation, the original management target disappears as a comparison. Keep adopted budget revisions and forecast revisions distinct, then review the difference and its source context.

Questions for a budget-versus-forecast review

Are the actuals and budget using compatible dates, currency and accounting basis?
Which source or assumption changed the forecast?
Is a favorable or unfavorable variance measured consistently?
What remains incomplete, and what decision belongs to management?

A measured difference can identify where actual results diverged from a target. It does not, by itself, explain the cause.

Explore budgets and forecasts in PursuitBid →

See where comparisons appear in a report →