登录查看更多内容

Last updated on 2024年8月28日

How do you assess the credibility and realism of budget forecasts?

由人工智能和领英社区提供技术支持

Budget forecasts are essential tools for planning and managing public finances, but they can also be subject to errors, biases, and manipulation. How do you assess the credibility and realism of budget forecasts, and what factors can affect their quality and accuracy? In this article, we will discuss some of the principles and practices that can help you evaluate budget forecasts and improve your budget process.

此文章中的业界达人

由社区从 8 条内容中精选。了解更多

Daria Fedechkina, CMA, CSCA

Finance Director/Head of Finance/CFO/Digital Transformation/Sustainable Finance
Maureen Holohan

Principal, Avise Solutions
Ammar S.

1 Fiscal transparency

Fiscal transparency refers to the openness and accountability of governments in disclosing their fiscal activities, policies, and outcomes. Fiscal transparency can enhance the credibility and realism of budget forecasts by providing reliable and timely information, enabling public scrutiny and participation, and reducing the risks of fiscal surprises and misreporting. To achieve fiscal transparency, follow the international standards and guidelines, such as the IMF's Fiscal Transparency Code and the OECD's Best Practices for Budget Transparency.

添加您的观点

Ammar S.
举报内容
To ensure the credibility and realism of budget forecasts, a systematic approach is needed. This includes historical performance analysis, assumptions review, external factors consideration, methodology and models, variance analysis, stakeholder input, sensitivity analysis, contingency planning, transparency and documentation, and independent review. These steps help identify patterns, trends, anomalies, and potential overestimation or underestimation in past budgets and actual results. The assumptions should be realistic, aligned with market conditions, and based on reliable data. External factors should be considered, and methodologies and models should be appropriate for the business context.

已翻译

赞

2 Forecasting methods

Forecasting methods are the techniques and models that are used to project the future values of key fiscal variables, such as revenues, expenditures, deficits, and debt. Forecasting methods can vary in their complexity, assumptions, and data requirements, and they can have different strengths and limitations. To assess the credibility and realism of budget forecasts, you should understand the forecasting methods that are used, their underlying logic and rationale, their sources and quality of data, and their sensitivity and uncertainty analysis.

添加您的观点

mazen yasser

Senior Accountant | Problem Solving, Analytical Skills
举报内容
Quantitative Forecasting Methods: Time series analysis: Uses historical data to identify patterns and trends. Regression analysis: Finds relationships between variables to make predictions. Econometric modeling: Creates mathematical models to represent economic relationships. Artificial neural networks: Learns complex patterns in data to make predictions. Qualitative Forecasting Methods: Expert opinion: Relies on the judgments of experts in the field. Delphi method: Iterative process of collecting expert opinions. Jury of executive opinion: A group of experts collectively makes a forecast.

已翻译

赞
Carlos Roberto Kassai

Software: SBPL - Strategic Budget Plan | Plano Or?amentário | Custos | Pricing | Relatórios Gerenciais | Capacita??o em Controladoria e Finan?as
举报内容
O que vem ocorrendo nos 2 últimos anos, serve como base comparativa, nas proje??es, bastando visualizar os gráficos, adicionando ou retirando ajustes. é como se houvesse uma for?a do passado conduzindo o presente e o futuro (Lei da inércia). No Budget podemos corrigir e redirecionar o caminho, caso n?o seja o ideal para a empresa, e investir a??es para que isso ocorra, acompanhando sempre real x or?ado

已翻译

赞

3 Forecasting performance

Forecasting performance is the measure of how well the budget forecasts match the actual fiscal outcomes. Forecasting performance can be evaluated by using various indicators such as forecast errors, deviations, biases, and revisions. Forecasting performance can indicate the accuracy and reliability of budget forecasts, as well as the potential causes and consequences of forecast errors. To assess the credibility and realism of budget forecasts, compare the budget forecasts with the actual outcomes, identify the main sources and drivers of forecast errors, and monitor and report the forecast performance over time.

添加您的观点

mazen yasser

Senior Accountant | Problem Solving, Analytical Skills
举报内容
To assess budget forecasts, check: Past data: Do forecasts match past results? Economic assumptions: Are assumptions realistic and backed by evidence? Industry & competition: Are market factors considered? Risks: Are there plans for potential issues? Experts: Did experts review the forecast? Clarity: Is the method clear and documented? In short, forecasts should be based on strong data, reasonable assumptions, consider risks, have expert input, and be clear.

已翻译

赞

4 Forecasting institutions

Forecasting institutions are the organizations and arrangements that are responsible for producing and overseeing the budget forecasts. Forecasting institutions can include the executive branch, the legislature, the independent fiscal institutions, the statistical agencies, and the external auditors. Forecasting institutions can influence the credibility and realism of budget forecasts by setting the roles and responsibilities, rules and procedures, standards and criteria, and checks and balances for the forecasting process. To assess the credibility and realism of budget forecasts, examine the institutional framework and governance of the forecasting process, the degree of independence and accountability of the forecasting institutions, and the quality and credibility of their outputs and reports.

添加您的观点

5 Forecasting challenges

Forecasting challenges are the difficulties and uncertainties that can affect the quality and accuracy of budget forecasts. Forecasting challenges can arise from various factors, such as the complexity and volatility of the fiscal environment, the structural and behavioral changes in the economy and society, the shocks and crises that can disrupt the fiscal outlook, and the political and institutional constraints that can limit the forecasting capacity and credibility. To assess the credibility and realism of budget forecasts, it's important to recognize and anticipate the potential forecasting challenges, assess their likelihood and impact, and adopt appropriate strategies and measures to mitigate them.

添加您的观点

6 Forecasting improvement

Forecasting improvement is the process of enhancing the quality and accuracy of budget forecasts by learning from past experiences, adopting best practices, and implementing the necessary reforms. Forecasting improvement can increase the credibility and realism of budget forecasts by reducing the forecast errors and biases, improving the forecast methods and data, strengthening the forecast institutions and governance, and addressing the forecast challenges and risks. To assess the credibility and realism of budget forecasts, conduct regular and systematic reviews and evaluations of the forecasting process, identify the areas and opportunities for improvement, and develop and implement action plans and recommendations for improvement.

添加您的观点

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

添加您的观点

Daria Fedechkina, CMA, CSCA

Finance Director/Head of Finance/CFO/Digital Transformation/Sustainable Finance
举报内容
To assess the credibility and realism of budget forecasts we can use 1. Historical Performance Analysis - evaluating how previous budgets compared to actual outcomes. This analysis helps to identify any consistent over or underestimation and provides insight into the accuracy of forecasting methods used by managers. 2. Transparency of Assumptions: Credibility in budget forecasts heavily depends on the transparency of the assumptions made. Detailed disclosure of all assumptions regarding revenue drivers, cost factors, economic conditions, and other relevant variables enhances the realism of the forecast. 3. Comparing budget assumptions and performance against industry peers provides an external perspective on realism.

已翻译

赞
Maureen Holohan

Principal, Avise Solutions
举报内容
This budget forecasting article just repeats the same sentences and is not helpful to teach anyone about budget transparency, forecasting methods, or performance analysis. It is a word jumble.

已翻译

赞
Carlos Roberto Kassai

Software: SBPL - Strategic Budget Plan | Plano Or?amentário | Custos | Pricing | Relatórios Gerenciais | Capacita??o em Controladoria e Finan?as
举报内容
O fortalecimento da cultura or?amentária proporciona maior assertividade nas proje??es econ?mico-financeiras O tempo de amadurecimento e sofistica??o desta cultura e seus hábitos, pode ser encurtado, com Software +mais Conceitos de Negócios que, como um “cérebro eletr?nico coach” dotado de Memória +mais Algoritmos, transfere aprendizado das boas práticas existentes vividas por outras corpora??es ao longo de muitos anos. "Essa transferência ocorre por meio do roteiro de procedimentos para a utiliza??o do software - que se torna hábito, guiado pelos conceitos incorporados de negócio."

已翻译

赞
Renson Gisiora

Rainmaker | Chairman @Eagles Saving Group | Helping you Grow Money ??
举报内容
I personally had created a budget based on assumptions and through data I have I am able to fine-tune the budget forecast for the next year based on the previous data I have.

已翻译

赞

Budget Process

+ 关注

给文章评分

我们借助人工智能创建了此文章。您认为这篇文章怎么样？

很棒不太好

举报此文章

查看全部

How do you assess the credibility and realism of budget forecasts?

1

2

3

4

5

6

7

1 Fiscal transparency

2 Forecasting methods

3 Forecasting performance

4 Forecasting institutions

5 Forecasting challenges

6 Forecasting improvement

7 Here’s what else to consider

Budget Process

给文章评分

感谢您的反馈

更多Budget Process相关文章

更多相关阅读内容