Add Rolling Quarterly Forecasts to Traditional Budgeting Process

(Beyond) Budgeting
Knowledge Center

Forum

New Topic

Blouw. M.E.
Accountant, South Africa

Add Rolling Quarterly Forecasts to Traditional Budgeting Process

One should look at a budget plan as a base against which company and budget holder’s performance is measured.
Any economic changes can be captured and adjusted for during rolling forecast done on a quarterly basis. This bridges the gap between a static plan and current market changes, thus budgeting as a process becomes more relevant and responsive.

  Steve Player
Director, United States
 

Why Budgeting is a Bad Way to Measure a Budget Holder's Performance

When you try to use budgets as the way to measure a budget holder's performance, the process creates a CONFLICT OF INTEREST which results in back and forth negotiation of what the number should be. Since this is about future performance it inherently includes assumptions about the conditions that this performance will be delivered under. When changes of economic conditions occur and these assumptions turn out to be wrong, the measurement system suffers a design failure.
To protect against this (or any other) failure, budget holders naturally seek to low ball or sand bag their budgets. As a result, traditional budgeting systems can better be described as negotiating "minimum acceptable performance."
Rolling forecasts that are adjusted for changes of economic conditions may help a little to decrease the mentioned negotiation, but the Beyond Budgeting movement has identified much better ways to achieve the goals of budgeting without the negative behavior.

Start a new forum topic

 

More on (Beyond) Budgeting
Summary
Forum
Budgeting Must Be Flexible and Auditable
Financial Measure / Budgeting is no Longer Dominant
Budgeting for Guidance, not for Control
'Beyond' Budgeting -- Call it Whatever, It's Necessary
Add Rolling Quarterly Forecasts to Traditional Budgeting Process
Budgeting Has Become the End Instead of a Tool to an End
Budgeting is the Essence of Good Management
Budgets Should Facilitate Communication, Collaboration, Cooperation, and Coordination
Can we Use Beyond Budgeting in Entrepreneurial Companies?
What is a Budget? Definition
Budgeting in Uncertain Business Climate
Budgeting Must Be Integrated in Strategic Process
Rolling Forecast in Beyond Budgeting
🔥Value Based Budgeting
Why Budgeting and Sound Financial Practices are Crucial
Lump Sum Budgeting with a Cushion
Best Practices
Weaknesses of Traditional Budgeting
Special Interest Group

Do you have a keen interest in (Beyond) Budgeting? Sign up for free

Notify your students

Copy this into your study materials:

and add a hyperlink to:

Link to this discussion

Copy this HTML code to your web site:

(Beyond) Budgeting
Knowledge Center



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2021 12manage - The Executive Fast Track. V15.8 - Last updated: 25-7-2021. All names ™ of their owners.