Thousands of Hours Wasted

  • Budgeting involves all mangers and many supervisors consuming 100 to 400 hours of their time
  • When the first budget summary does not meet goals, the budget is reworked
  • If the budget still does not meet goals, senior management dictates revenue and expense expectations

Game Playing

  • Incentive for managers is to "pad" the budget so it will be achieved on a monthly basis
  • When hours or other expenses are given “cushion” by mangers, the summary budget does not meet goals
  • If managers “have money in the budget” there is a strong incentive to spend it so the budget will not get cut next year

Out of Date Before You Begin the Fiscal Year

  • Competition changes demand making the budget out of date
  • Unanticipated changes in the economy result in an irrelevant budget
  • Prices for staff or supplies are increased in the market

A Rolling Six Quarter Forecast Solves the Problems

  • Very efficient, only needs 15-20 hours a quarter of Finance staff time
  • Eliminates the need for all front line manager involvement
  • Always updated quarterly at a minimum, and more often, if the business environment changes