Comparing Cash Flow Forecasting and Budgeting

Cash flow forecasting helps identify trends in incoming and outgoing cash so that companies can prepare for future expenditures, avoid excessive debt, and meet payroll obligations. This process often involves using budgeting to determine how much money will be required over a given period of time. This type of forecast also takes into account other factors such as the cost to produce goods or services, expenses related to ongoing operations, interest payments on loans, capital repayments, tax instalments and other assets required to help grow a business.