Share these talks and lectures with your colleagues
Invite colleaguesWe noted you are experiencing viewing problems
-
Check with your IT department that JWPlatform, JWPlayer and Amazon AWS & CloudFront are not being blocked by your network. The relevant domains are *.jwplatform.com, *.jwpsrv.com, *.jwpcdn.com, jwpltx.com, jwpsrv.a.ssl.fastly.net, *.amazonaws.com and *.cloudfront.net. The relevant ports are 80 and 443.
-
Check the following talk links to see which ones work correctly:
Auto Mode
HTTP Progressive Download Send us your results from the above test links at access@hstalks.com and we will contact you with further advice on troubleshooting your viewing problems. -
No luck yet? More tips for troubleshooting viewing issues
-
Contact HST Support access@hstalks.com
-
Please review our troubleshooting guide for tips and advice on resolving your viewing problems.
-
For additional help, please don't hesitate to contact HST support access@hstalks.com
We hope you have enjoyed this limited-length demo
This is a limited length demo talk; you may
login or
review methods of
obtaining more access.
Printable Handouts
Navigable Slide Index
This material is restricted to subscribers.
Topics Covered
- Budgets vs. Forecasts
- Key budgeting tasks
- Cash flow example
- Short-term budgeting
Talk Citation
McDonald, M. (2021, March 30). Operational budgeting [Video file]. In The Business & Management Collection, Henry Stewart Talks. Retrieved October 8, 2024, from https://doi.org/10.69645/RSOT1452.Export Citation (RIS)
Publication History
Other Talks in the Series: Finance for Non-Finance Professionals
Transcript
Please wait while the transcript is being prepared...
0:00
Hello, welcome to operational budgeting.
I'm Dr. Michael McDonald.
Today I'd like to talk to you about this underappreciated aspect of the financial world.
0:12
People often talk in business about budgets,
and they talk about forecasts.
But what's left out of the equation is what the difference between
budgets and forecasts actually is from a business perspective.
Budgets are generally created on an annual basis and then they're updated quarterly.
The budget is an aspirational goal.
It tells us from the business' point of view where we want to go.
Budgets are generally used for setting goals,
for creating incentives for the firm, things like that.
Essentially they're where the business hopes to get to over time,
and then the management team behind the business uses
the budget as a way to bring the entire company together,
trying to achieve those goals.
Budgets again, are less about managing the operations and
more about bringing the whole company together behind an objective over time.
So they're not necessarily critical for decision-making as a result.
In contrast, forecasts tend to be much more precise than budgets.
Forecasts are created annually like budgets,
but they're updated on a weekly or perhaps a monthly basis.
The forecast tells us not so much where we would like to go,
but where we are going to go.
So it's less of an aspirational document and more of
an actual projection given the real day-to-day realities for the firm.
Forecasts are used for managing the day-to-day operations of the company,
and generally, they're restricted to the groups that need them.
Where we might share a budget across the firm as a whole,
you're unlikely to do that with a forecast.
Instead, you're going to send the forecast to the groups that
need it for their day-to-day decision-making purposes.