Using current knowledge for future planning.
Forecasting is the process of setting sales, revenue and expense budgets. This process takes place by using historical information, current strategy options and market intelligence to forecast future events and the resulting sales, revenue and costs.
The key purpose of forecasting is to help you determine by way of an educated estimate future profit, cash in the bank and investment requirements as part of your business planning process.
Once you have set your forecast you revisit it periodically to track your business’ performance against the forecast. You can then identify early on if you need to make changes to your business as you go.