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Difference Between Budget and Forecast Explained

What Is a Budget?

What Are the Types of Budgets?

What Is Forecasting?

What Are the Types of Forecasting?

What Are the Differences Between a Budget and a Forecast?

In the following table, you will find the differences between a budget and a forecast. This simplified comparison of budget vs forecast will help you gain more clarity on the topic.





Based on planned events.

Based on probable or anticipated events.


Has a fixed target for a period.

Target is flexible and tentative.


Covers a shorter period of time.

Covers both long and short periods of time.

Time Period

Budgeting begins when forecasting ends.

Forecasting ends with the probable planning of future events.

Area of Work

Budgeting accounts for the whole business.

Forecasting usually focuses on a specific function.


Budgeting acts both as a controlling & planning financial tool.

Forecasting only acts as a financial planning tool.

The key difference between budget and forecast is that budget is a wide concept while forecast narrows down the financial plans of a company. A budget shows what the business wants to achieve in a financial year, whereas a forecast reflects where it is actually going.

FAQs About Budget and Forecast