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How they differ
A budget is a fixed plan for the year — target income, planned costs, expected profit — agreed up front. A forecast is a living estimate that you revise as actual results come in. The budget answers “what did we plan?”; the forecast answers “what do we now expect?”. Comparing actuals to budget (variance analysis) shows where the business is drifting.
What this means for your company
Set an annual budget with a budget template, then run a rolling cash-flow forecast against it. When the forecast diverges from budget, you learn early whether to cut costs, chase sales or arrange finance. Directors who track budget-versus-actual monthly rarely get blindsided — the gap is the warning system.
What it means for you
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.
Frequently asked questions
Is a budget the same as a cash-flow forecast?
No. A budget plans income and costs (often on an accruals basis); a cash-flow forecast tracks the timing of actual money in and out. You need both — one sets the target, the other manages liquidity.
How often should I revisit the budget?
Set it annually but review performance against it monthly through variance analysis. The budget itself usually stays fixed as a benchmark, while the forecast updates continuously to reflect reality.
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Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.