Differences between strategic planning, budgeting and forecasting

Differences between strategic planning, budgeting and forecasting

Strategic planning, budgeting and forecasting

Most of the companies use strategic planning, budgeting and forecasting to evaluate their current situation and to get a better view on the future of the company. Our experience reveals that many companies only spend 50% of their time on the effective analysis of data and the other 50% on data collection1. Especially the use of spreadsheets may lead to problems like inconsistencies and a lack of flexibility. And still, 69% of the companies use spreadsheets for their planning, budgeting and forecasting2.

We would like to deal with two main questions in this article: what are the differences between strategic planning, budgeting and forecasting? And how can a professional tool help you in achieving efficiency in these processes?

The main differences

Strategic planning

Strategic planning has the purpose to define the direction and expectations of a company, which are based on the vision of the stakeholders. An activity plan is established for a timeline of three to five years: what are the main objectives and where does the company want to be within 3 to 5 years? Strategic planning is a process of continuous reflection.


The establishment of the budget happens in many cases on a yearly basis and is based on data from different sources and levels. The resources are being divided and the company defines how the general plan and the objectives can be achieved per period. The presentation of a budget is mostly financial (balance sheet, P&L, cash flow…).


When doing forecasting, various data is being used to predict the financial outcomes of the company for the coming months or years. The executives make use of realistic historical data to establish new projections, which are then integrated in the budget. Timing can be per year or per semester.

How can technology help you in structuring these processes?

A dedicated tool can help you to structure your processes and spend significant less time and resources to your budgeting and planning. A couple of the advantages are:


1 « Breaking away: How leading finance functions are redefining excellence, Finance Effectiveness benchmark study », PwC, 2015

2 « CFO budgeting survey », PwC Luxemburg, 2015

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