What is the difference between a budget and a forecast, and what are the various techniques used for each?

Question

Accepted Answer

Budget is a plan for future financial activities, while forecast is a prediction of future financial outcomes.

Budget is a detailed financial plan for a specific period, usually a year, outlining expected revenues and expenses.
Forecast is an estimate of future financial outcomes based on past data and current trends.
Budgeting techniques include zero-based budgeting, incremental budgeting, and activity-based budgeting.
Forecasting techniques include qualitative methods like expert opinion and quantitative methods like time series analysis.
Budgets are typically set at the beginning of a period, while forecasts are updated regularly to reflect changing circumstances.