To budget or not to budget. It is the questions that companies are
asking their managers to consider. Traditionally, budgets is the
proposed plan of action by management for a specific period. Used for
the current year or as a follow-up to the prior year ending accounting
cycle. Budgeting is a help to managers by helping departments to set
goals , judge and measure performance or even motive employees. i
In the article it talks about how ineffective budgeting can be. i GL groups
points out that they sway from using budgets. Their reasoning for this
way of thinking was because budgets are inflexible and can not be
adjusted once that are set in place. Also, budgeting can have an
negative affect within a business. For example, managers may be force
to think that their expense budget should be used in its entirety even if
it is not needed. Or it can lead to poor decisions made to meet certain
expense goals.
I agree with the decision made in the article to look at employees,
customers and operations to make decisions on where money is spent.
This will lead to placing monies within the business that will provide the
best outcome for the business. Answering the important questions of
timing, does it make sense, or what is the worst that can happen. Not to
budget.
Budgets Don't Work: Here's How Businesses Can Do It Differently by mark
Rygelski
