Budget and Forecasting in Devon It is highly important that every company, whether a new start up or an expert, budgets and forecasts their spending in order to survive amongst their competition. Although some people use both terms to mean the same thing, there is a clear difference between the two.
A budget is a projection of all outgoing expenses over a certain period of time which is created before that set certain timescale. They are usually all made on assumptions which include external aspects such as market conditions. A budget can help a business keep control over their cash flow and make sure it is the best it can be to benefit them.
A forecast is a conservative estimation purely on how much sales you think your business will achieve in the upcoming year. This can be based on the revenue of the previous year and take into account how this can play out by either improving or decreasing.
It is vital that all companies follow these practices and use at least one of these methods of business planning that is why I.A.W Accountancy Services offer these services to you so that you can concentrate on running your business and building more of it.
