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budget is obsolete before June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.