Chapter 1

This chapter is about …

Defining budgets, budget/profit and loss forecasts and cash flow forecasts. We’ll examine the use of spreadsheet-based budgets and forecasts for day-to-day management and discuss why they are not the sole province of accountants. We’ll look at planning cycles, and whether to use fixed, rolling or perpetual forecasts. Will a forecast ever be exactly right, and indeed does it need to be?

Definitions of budgets and budget forecasts

Although the terms budget and budget forecast are sometimes interpreted in different ways, the definitions we will use are probably the most widely accepted versions.

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