Forecasting Advantages
Forecasting Advantages
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Forecasting Advantages SiteMap
Forecasting has many advantages:
  • Less time consuming since often forecast at higher level with less detail
  • less cost since less time7% of companies say budget in obsolete before year starts
  • more accurate since often done more frequently
  • Avoid minimization exercise because organization pays based on performance and not making budget
  • Can consider volume and can use flexible budgeting
  • Can incorporate Activity Budgeting which shows activities which is way employees think.
Traditional Budgeting has many disadvantages:
  • Time consuming
  • Costly: (e.g. for a Fortune 500 company with a budget department costing $500,000 it was calculated to cost $5,000,000 to create and monitor the annual budget). CFO said he was not getting a good return on time and dollars spent in budgeting
  • 27% of companies say budget in obsolete before year starts
  • 67% of companies say budget is obsolete before June
  • Minimization exercise as employees often sand bag in order to ensure their bonus
  • Does not consider volume unless organization uses flexible budgeting
  • Employees don't think phone, electric, depreciation, amortization. They think in terms of their activities.

Call John Antos at 972-980-7407 to find out how Next Generation Forecasting can help you reach your goals and give your peace of mind.

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