Companies use budgeting and financial forecasting as tools to create a strategy for the direction that management wishes to take the company—budgeting—and to determine if that route is sound—financial forecasting.
Despite the fact that budgeting and financial forecasting are frequently used in tandem, the two ideas differ significantly. The predicted revenues that a company wishes to generate for a future period are quantified through budgeting. Financial forecasting, on the other hand, makes predictions about how much money will be made in the future.