Weaknesses of Traditional Budgeting


 
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Weaknesses of Traditional Budgeting
Anneke Zwart, Moderator
Fraser and Hope mention the main weaknesses of annual (traditional) budgeting that gave rise to the development of thinking beyond budgeting:
1. Time Consuming - Budgeting takes a lot of time. Average time needed for budgeting lies between two and four months according to the authors.
2. Costly - Despite developments of high quality and fast computer networks, the process of budgeting still remains to be expensive.
3. Useless - After visiting several companies, it appeared that many companies perceived the results of budgeting differently. Budget gave some companies more control, while in other companies budgeting was perceived as being unimportant and not meeting any needs.
4. Bureaucratic - The continuous pressure on prices of goods and services asks for decreases in structural costs and in bureaucracy.
5. Frequency - Initially changes in the competitive environment resulted in budgeting more often in a year, but its only result is a rising workload th...Register
 

 
On Weaknesses of Traditional Budgeting 6b: Changing Economic Enviroment
Nita, Member
Hi, Anneke,
I like your observation that budg...
 

 
On Weaknesses of Traditional Budgeting 5: The Trisemester Way
Arif ur Rehman, Member
In academics the fundamental shift from annual exa...
 

 
Weaknesses of Traditional Budgeting: 7. Budgeting is Often not Integrated with ERP
Jagdish B Acharya, Premium Member
From past business results, vision of business lea...
 

 
On Weaknesses of Traditional Budgeting 3: Now Useless
KALOGO PAUL, Member
This weakness of traditional budgeting in many org...
 

 
On Weaknesses of Traditional Budgeting 3: Use Budgeting Appropriately
Alpin McGregor, Member
Surely problems arise with budgeting when it is no...
 

 
On Weaknesses of Traditional Budgeting 3: Don't Use Budgeting for History Only
George Kerstholt, Member
If budgeting is used as a means of reference for a...
 

 
Budgets... They Have a Place But When Misused!
Donald Liveley, Member
Budgets are about compliance (tactical) rather tha...
 

 
Weaknesses of Annual Budgeting: 8. Perspective of Cost Control
Hakvoort, Member
What's the definition of traditional budgeting? Tr...
 

 
On Weaknesses of Traditional Budgeting 3: Not Useless...
palermo, Member
Hello Anneke, I agree with your statements except ...
 

 
Weaknesses of Traditional Budgeting: 9. Included in Project Management Tools
CHIEDU UDE, Member
Ensuring discipline and control are essential attr...
 

 
Another Weakness of Budgeting: 10. Vulnerable for Cost Cutting
ADAM SAID, Member
The mentioned weaknesses of (traditional) budgetin...
 

 
All Mentioned Weaknesses do not mean Budgeting is Useless
Sergey Baltin, Member
When you at the very beginning of installing budge...
 

 
Further Weaknesses of Traditional Budgeting
K.Narayana Moorthy, Member
- It is not oriented to long-term vision.
- I...
 

 
Waste of Energy, Causes Sandbagging
JC de Jong, Premium Member
Hello Anneke, I agree with your points and the two...
 

 
On 3. Useless: Managers don't see the Value of Budgeting
jiun, Member
The weak points and strengths of budgeting should ...
 

   

 
Missing Process and Software Support
Istvan Szeman, Member
One essential (and missing) building block is a we...
 

 
Weaknesses of Traditional Budgets
NANG Theophile, Member
Hi all, I appreciate what is previously said by @<...
 

   

 
Weaknesses of Annual Budgeting
RUBEN ACOSTA, Member
Dear Anneke, you are just right in your observatio...
 

 
Lack of Process and Software..
Donald Liveley, Member
The reason that processes and technological suppor...
 

 
Weaknesses of Traditional Budget, 3 Useless
Adam Mohammed Baba, Member
Political interference as a result of political ex...
 

 
Weaknesses of Traditional Budgeting
K.Narayana Moorthy, Member
I agree with Adam Mohamed Baba - budgeting must be...
 

   

 
Careful with the Effectiveness of Numbers
ADAM SAID, Member
I think indeed numbers are effective tools for dec...
 

 
Weaknesses of Traditional Budgeting
Michael T Iorngurum, Member
Your reasons are cogent (Editor: ~convincing). Par...
 

   

 
Weaknesses of Traditional Budget
K.Narayana Moorthy, Member
While it is agreed that a budget is important, it ...
 

   

 
 

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