Business of all sizes and in all industries can benefit from the strategic insights and financial controls provided by the annual budgeting process. However, depending on the velocity of changes in the general economy and/or your specific industry, an annual budget can become stale and thus less valuable as management tool.
Neil Amoto’s October 2013 Journal of Accountancy article ‘Forward Roll: How companies can move beyond traditional budgeting’ details how one company moved from a traditional annual budget to a fifteen month rolling budget, updated every three months. Working through his case study’s example, Amoto explains how, for some companies, moving to a more agile framework enhance the budget’s effectiveness as a tool.
In my opinion an effective budget process, traditional or rolling, will provide key decision makers with a worthwhile tool. If you are interested in discussing this concept in more detail or revisiting your budgeting options, please don’t hesitate to contact me.