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Budget forecasting is the process of making projections about revenues and expenditures for a future period based on historical data, market research, and other relevant information. These forecasts form the basis for a company's budget.
The purpose of budget forecasting is to provide an estimate of the revenues and expenses that will occur in the future. This process is vital for budget planning as it helps to allocate resources effectively. It can also guide strategic planning and decision-making. While budget forecasts are inherently uncertain, regular review and adjustment can help maintain accuracy.
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