How do I calculate forecast and budgeting

Budget planningWhat is important in budget planning

Budget planning is a complex process in a company in which many framework conditions play a role:

Budgets should contribute to the company's success
A company's financial and human resources should be deployed where they bear the most fruit. The principle of economic efficiency applies. It is essential that the budget and resources are used in such a way that the company goals are achieved as well as possible (effectiveness) and that no resources are unnecessarily wasted (efficiency).

The right allocation of budgets is difficult
It is difficult for decision-makers to recognize and estimate where they can best use the available resources. One reason: You will only be informed very selectively. The budget recipients just inform that their budget requirements are being met.

Budgets are based on assumptions about future developments
Budget planning is dependent on forecasts of future developments. Even the most sophisticated methods and procedures for analyzing profitability are based on assumptions about the future that are often too optimistic, sometimes too pessimistic - depending on the interests of the protagonists.

Budgets are a status symbol
That is why the managers in companies scramble for the highest possible budget. It is intrigued, politicized, glossed over, exaggerated or badly done. Anyone who intervenes in the balanced relationship of forces stirs up envy, resentment and conflicts. This leads to demotivation or even sabotage.