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Budgeting & Forecasting › Rolling Forecasts

What is the difference between a forecast and a target?

Beginner

Answer

A forecast is an unbiased estimate of what is most likely to happen; a target is a goal the organization aims to achieve. Confusing them causes problems—forecasts biased toward targets become unreliable. Good practice keeps forecasts honest (what will happen) separate from targets (what we want to happen).
Real-world example The sales forecast honestly predicts a shortfall even though the target remains unchanged.

Common follow-ups: Why keep forecasts and targets separate? | What happens if a forecast is biased toward the target?

The Budgeting Process Variance Analysis Rolling Forecasts
All 30 Rolling Forecasts questions