Abstract
Many companies recognize that the traditional annual budget (produced near yearend and then used as a guide for the following year even though it is out of date) is just not good enough. Instead, they are turning to alternative budgets (forecasts) that are updated every few months. They impose new requirements on financial decision-making. Management must access and process information more quickly, and this often means a change of the current practice of data collection and processing or even acquiring special software to do the job. The budgeting process and financial decisions can be accelerated and improved in several ways, and the paper deals with advantages and disadvantages of the possible ways.
Highlights
Budgeting is most often thought of as having to do with the planning and control of revenues and expense, i.e. with managing the common operations of a business or other organization [1]
The quick feedback and expected impact on important items of the balance sheet and cash flow can speed up the budgeting process; the Management Information System (MIS) and IT techniques play a great role in this improvement
Budgeting consumes the better part of the year and involves many staff and line people [5]. 10 speed up the budgeting and financial decision-making process, several techniques such as programming directly in the MIS, improving budgeting in the spreadsheet or acquiring special budgeting software can be used
Summary
Budgeting is most often thought of as having to do with the planning and control of revenues and expense, i.e. with managing the common operations of a business or other organization [1]. In a world where customer loyalty is volatile, product life cycles are shortening, competitors can arise suddenly from anywhere and the best people are attracted to organizations that promote managerial freedom and responsibility, the traditional budgeting approach is a severe handicap. Put another way, budgets are barriers to competitive success when knowledge rather than capital is the scarce economic resource. The implementation of EMS is expected to help organisations compete more effectively in the market [3] For those reasons managers may search for new ways to speed up the budgeting and financial decision-making process and make it more rational
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