How many people in your organization love the annual budgeting process? Probably none. The mere mention of the word "budget" raises eyebrows and evokes cynicism.
Over the twenty years that I have worked with Beyond Budgeting, I have asked tens of thousands of managers and Finance people all over the world about how satisfied they are with the budgeting process.
A few days ago I was looking through some blogs on LinkedIn when I came across a comment that suggested the purpose of budgeting was to set stretch targets. A number of people seemed to support this idea, although I personally have to disagree for two key reasons.
In a rapidly changing business environment, the traditional, out-dated budgeting mentality is being challenged more and more. While the process of moving away from a traditional budgeting mentality is painful and slow, it is happening around the globe. The question is, are we ready to abandon the traditional budget completely?
For organizations with annual expense budgets, it is important to have procedures for monitoring expenditures and budget items throughout the year. This article visually describes how to use statistical forecasting models, uncertainty ranges and space forecasting models for this purpose.
A move beyond traditional budgeting does not necessarily mean losing the budget. Rather, it’s important to reduce some of the traditional planning approach and taking a modern, flexible view of how to best remain agile and perform better.