There are times when a traditional budget may be the best option, They
are very useful for strategic planning and pinpointing specific areas or
departments that are are not operating as efficiently as possible. They
are based on historic information and organized. On the other hand,
that information can be stale and inflexible. i The bigger concern and
what I experience with my own company is that too often the decision
are based solely on staying under budget and doing so is often tied
directly to the bonuses of executives.
Using an alternative approach that is more flexible and encourages
everyone in the company to think more critically about expenses and
efficiency of operations seems like a better approach. Sometimes the
decision that is best for the company in the long run, does not fit in the
current budget but should still be considered. i The ability to make
changes closer to real time and takes into account best interests and
not just an immediate return on the investment would be more
important to me.
Michele
Datar, S. (n.d.). Horngren’s Cost Accounting: A Managerial Emphasis (16th
ed.) [E-book].
P. (2022, April 20). Advantages And Disadvantages Of Budget | What is
Budget?, Advantages and Limitations of Budget. A Plus Topper.
https://www.aplustopper.com/advantages-and-disadvantages-of-
budget/
Rygelski, M. (2018, January 5). Budgets Don’t Work: Here’s How
Businesses Can Do It Differently. Forbes.
https://www.forbes.com/sites/forbesfinancecouncil/2018/01/05/b
udgets-dont-work-heres-how-businesses-can-do-it-
differently/?sh=58f638f46b8a
