Budgeting FAQ
Budgeting Frequently Asked Questions
Home  |   About Us  |   Services  |   Consultants  |   Search  |   Sitemap  |   Contact Us

Budgeting FAQ SiteMap
  1. What is advantage of Budgeting?
  2. How does traditional Budgeting differ from Activity Based Budgeting?
  3. How does Budgeting differ from Planning?
  4. How does Budgeting differ from Forecasting?
  5. Does traditional Budgeting support Improvement?

1. What is advantage of managing by Budgeting

Creating a Budget:

  • translates a plan into financial terms.
  • helps determine cash flow requirements for business
  • can indicate priorities by funding high priority items
  • helps understand timing and cash flow needs for large capital projects

Back to Top

2. How does traditional budgeting differ from Activity Based Budgeting?

Traditional budgeting focuses on:

  • expenses
  • departments, cost centers, divisions
  • variance analysis of actual versus budget

Activity Based Budgeting focuses on:

  • cost objects (e.g. customers, products, services, suppliers)
  • volume for each activity
  • cost drivers and how costs vary with volume )e.g. flexible budgeting)
  • performance improvement
  • performance measures of activities and processes
  • activities and processes that employees can understand rather than abstract concepts like depreciation and amortization
  • how cross functional processes affect cost

Back to Top

3. How does Budgeting differ from Planning?

Planning describes in words what an organization intends to accomplish in some time frame..

Budgeting translates a plan into financial terms.

Back to Top

4. How does Budgeting differ from Forecasting?

Budgeting is usually a once per year endeavor.

Forecasting updates on some regular basis what the organization thinks the results will be based on the latest information.

  • Quarterly forecasts until year end or for next 4 quarters
  • Semi-annual forecasts
  • rolling 12 month forecasts
  • monthly forecasts for next quarter and quarterly forecasts till end of year

Back to Top

5. Does Budgeting support Improvement?

  • Jack Welch said that "Budgeting is Bane of Business.
  • .Budgeting is a minimization exercise because employees often sand bag the budget to increase their bonus.

Back to Top

Call John Antos at 972-980-7407 to find out how to Improve your Budgeting to help you reach your goals and give your peace of mind

Budgeting Articles
Budgeting Consulting
Budgeting Consultants
Budgeting & Cost Accounting
Budgeting Disadvantages
Budgeting FAQ
Budgeting Software
Budgeting Training

Find Out How We Can Help

Have Budgeting specialist contact me

Name
Title
Company
Address
E-mail
Phone
Problem
or
Challenge

Phone: 972.980.7407 email: Contact us
Value Creation Group, Inc.
7820 Scotia Dr. #2000
Dallas, TX 75248

 



copyright  1984-2013 Value Creation Group Â, Inc. For additional information, click Contact Us