Often used synonymously with the term cash flow forecast. As suggested in the information on budgets, however, the two terms should not be confused. A forecast is a prediction of events that are likely to happen in the future. Whereas a budget is a planned target to achieve. Budgets are often based on forecasts but are not in themselves forecasts. For example, with regards to cash flow, a business may prepare a cash flow forecast to identify possible problems in meeting debts as they fall due. It may then use this forecast to decide and implement / set up ways of overcoming any predicted cash flow problems. Having done this a business may then prepare a cash budget. This would have identical headings to the cash flow forecast (on which it should be based), but items listed should be viewed as planned targets to achieve rather than forecast likely outcomes. The business must strive to meet these targets to ensure cash flow problems are avoided.