Budgeting for Guidance, not for Control

			
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			              (Beyond) Budgeting > Forum > Budgeting for Guidance, not for Control
			            
			              Budgeting for Guidance, not for Control
Jagdish B Acharya, Consultant, India, Premium Member
Budgeting by itself is not bad. It is the importance that some organisations give to budgeting that may drive some to despise it.
Without budgets we would be playing hockey and reacting to stimulus with no idea of impact of step. With budgets, management knows if it is in control. 
Using budgets for centralized control has lot of disadvantages. The business environment is changing so fast that a decision about the future has all likelihood of going wrong unless it has flexibility. Budgeting figures are calculated much in advance and cannot and should not be used for absolute control. In an organisation culture where budgets are considered sacrosanct, people try to project beyond practical limits and justify end by spending accordingly. This can lead to situations where innovative ideas are not pursued because they could not be envisioned earlier.
Decisions should be based on current, not budgeted Evaluation of the need and should only be guided by overall budget. (...) Read more? Sign up for free
			            
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			                  			Use Budgeting for Guidance, but not for Control

															Paul Steele, Consultant, Australia, Member
(...)
			                  		
			                  			Budgets Lead to Suboptimal Gains When Overused for Control

															Jagdish B Acharya, Consultant, India, Premium Member
(...)
			                  		
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	                            (Beyond) Budgeting
	                          
	                                Summary
	                                ForumWeaknesses of Traditional Budgeting
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
Why Budgeting and Sound Financial Practices are Crucial
Lump Sum Budgeting with a Cushion

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