In developing an operating budget, what does the professional primarily use?

In developing an operating budget, professionals primarily use figures from the annual forecast with realistic timing of revenues and expenses because this approach allows for a comprehensive understanding of anticipated financial activity over the budget period. By relying on an annual forecast, professionals can integrate various elements essential for budgeting, such as projected income, expected expenses, and the timing of cash inflows and outflows.

This method ensures that the budget reflects not only the expected performance but also aligns with the financial realities of the organization. It facilitates accurate planning and resource allocation, making it easier for management to make informed decisions that impact the business's operations.

When using figures from the annual forecast, professionals can account for various factors that influence income and expenses, such as seasonality, market trends, and other forecasts that provide insights into revenue generation and cost management, contributing to the overall financial health of the organization.