Budgeting in Uncertain Business Climate

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Beyond Budgeting > Forum > Budgeting in Uncertain Business Climate

Budgeting in Uncertain Business Climate
Fareed Ezz, Analyst, Saudi Arabia, Member
What about when you are doing your business in an uncertain environment, for example your revenues comes from few mega projects with government, wining a deal or not will means millions +/- in your budgeting figures.
Do we need nested if statements in the budget, like: if we win this deal it will be like this, if we don't it will be like this, and if we win this project and that project...
To tell you the truth, this is budgeting in uncertainty is driving me crazy.:).

Budgeting in Changing Environment : Could What-if Analysis etc. Help?
abdul alim ahmad, Student (Other), Member
Budgeting is not efficient in a changing competitive environment...
Could various types of future analysis help organizations to make successful choices. The budget is an important guideline to follow, but current events are even more important to make good decisions. We are in fast lane. Changes are frequently happening and we need to be dynamic.

Avoid Throwing the Baby Out with the Bath Water
First of all, regular budgeting is not to be confused with capital budgeting.
Also we should differentiate budgeting as a tool for control and budgeting as a tool for planning.
In the latter role, budgeting is still a meaningful approach in dynamic environments.
Flexible and continuous budgeting, if properly applied, can handle the variations in the dynamic environment efficiently, and it may be used as a learning tool, too.
Static budgeting is associated with a predicatable, visible, stable environment, and it should not to be used in a changing environment.

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