Business forecasting Essay Example | Topics and Well Written Essays - 1250 words

Business prognostication - Essay ExampleBudgets do not evidently indicate the upcoming periods expenses and revenues, as competition in the market place increase, companies conduct recognized the need to accurately predict their future operations outcomes and the related resource requirements. Budgeting involves use of forecasting techniques, it is an organization-wide process and is central in strategic planning. Effectiveness of the budgeting process depend on the accuracy of forecasts, reliability, simplicity, and approach effectiveness, this accuracy can be enhanced by use of various techniques, using more than 1 method of forecasting, and obtaining enough and more accurate data (Rasmussen 2003, p. 113). Where budget forecasts fall far from actual outcomes for the period, it is likely that poor decisions on future projections are made and management may end up absent trust in budgets made while the whole organization may suffer poor planning. short budgeting forecasts res ults from poor budgeting tools lack of staff training on forecasting techniques, too little time allocated in making correct projections. Correct budget forecasts makes financial planning and execution of operating activities like staffing, descent management, marketing plans, and performance easier. Budget forecasting is used in making different types of budgets including purchase of rude(a) materials, inventory levels, adjusting incentive plans and staffing levels. Budget forecasting is central in project planning and costing, financial outlays and staff.