what is the difference between budgeting and planning use an example to explain?
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It takes a plan to get things off the ground. The plan continues to serve through the life of the business. Budgeting works close to the operating side and determines how things will run in the present and immediate future. Forecasting, while every bit as uncertain as the future, can help clarify things far in advance.
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['A Financial Plan – which is a budget projected out by month for the next 12 months. ... ', 'A Marketing Plan – which is what drives your Financial Plan.']
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Past and Future An income statement uses past transactions to determine income, whereas a profit and loss budget uses future transactions to estimate income. Profit and loss budgets are planned based on historical records of past income statements.
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A project plan is an extensive document which includes project risks, budget, organization, scope, goals, objectives and also project schedule. ... A plan focuses on the entire deliverables and processes. On the other hand, project schedules focus on the project activities, start and finish dates and dependencies.
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A budget differs from cash flow statement because a budget both projects how you expect to allocate the cash flow and records how the cash flow was actually spent at the end of the month. ... It is important to note that maintaining a budget can influence spending decisions.
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There's no a real difference, but we commonly use "plan on" when we have a plan in the long run. To plan on can also carry the meaning of count on. [I'm planning on your helping with the parking situation tomorrow night.] "Planning to" was always the accepted way of using that phrase until it was either Mrs.
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The strategic planning process quantifies the vision of the company and helps management determines what is possible. ... Financial Planning: Has a role in building the budget and the forecast and in general terms, is the top-down version of the budget.
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Planning is the process of thinking about the activities required to achieve a desired goal. It is the first and foremost activity to achieve desired results. It involves the creation and maintenance of a plan, such as psychological aspects that require conceptual skills.
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['The cost is more (or less) than budgeted. Budgets are prepared in advance and can only ever estimate income and expenditure. ... ', 'Planned activity did not occur when expected. ... ', 'Change in planned activity. ... ', 'Error/Omission.']
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Definitions. Financial planning is managing your finances over time in such a way that you can meet your business needs. Strategic planning is the process of determining the direction your company will take, the goals you have for the business and how to achieve what you want.
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The difference between a budget and a cash flow forecast is that the budget will show expected income and expenditure for a full twelve month period, whereas the cash flow forecast will break down month by month when you expect the money to actually be spent or received.
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Budgeting plays an important role in the effective utilization of available resources in order to achieve over all objectives of an organization. ... Budgeting provides a means of controlling income and expenditure of a business. It gives a plan for spending.
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The difference between working capital management and capital budgeting is: Working capital management has a long term focus, while capital budgeting is focused on a short-term timeframe. ... Working capital focuses on current assets and liabilities, while capital budgeting concentrates on long-term project evaluation.
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The most important difference to note is that a business plan is a written presentation of fact while a business proposal is a price quote and a call to action. According to an article on Entrepreneur.com, a business plan is a document that outlines a detailed description of how a business is set up.
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Forecasting on the other hand is an estimate of how much will be sold over the set period of time. In other words, the sales budget process shows the direction your company would like to go in and the forecast indicates how likely you are to arrive there on time.
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As nouns the difference between plan and outline is that plan is a drawing showing technical details of a building, machine, etc, with unwanted details omitted, and often using symbols rather than detailed drawing to represent doors, valves, etc while outline is a line marking the boundary of an object figure.
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The basic difference between plan, project and program is that a plan details a course of action; a project is short-term and designed to deliver a specified output within time, cost and quality parameters; and a program is a long-term managed portfolio of multiple projects designed to produce outcomes.