Budgeting and forecasting process is an event that most companies go through every year. The ultimate aim of performing budgeting and forecasting process is to established a financial target which set the company’s future direction.
Most companies prepare a master budget every year. The master budget is used to compare against the company’s interim performance which could be in monthly or a few months interval. Some companies prepare interim budgets or forecasts in between the years. The forecast is a combination of actual results of the passed months together with the budgeted figures of the future months to give a projected results for the year end.