If you are planning and forecasting regularly, readjusting every month with a quarterly or 6 month review, the budget process becomes easy. It is simply an annual in depth review of your strategic plan and forecasts and once completed, it's set in stone, a snap shot at that moment in time of how you expect your business to perform over the coming financial year.
Your forecasts roll on as normal and when you are reporting you can report actual against forecast and against budget and you will be able to explain variances in the P&L, balance sheet and cash flow to both. The analysis will highlight the reasons for any variance; e.g. a variance in debtors could be explained by sales being higher or lower than forecast/budget or cash collections faster or slower or a mixture thereof. If your sales are down and your receivables are up you really need to be able to explain that one, especially to yourself.
Once again, good forecasting makes your budgeting easy and explanations of variations to forecast and budget straightforward.