Should you bin the budget?
A majority of corporations and not-for-profit organizations use budgets as the main instrument of financial control, and often as a key measure of performance. In many cases, budgets have become onerous, bureaucratic burdens. Consequently, it is popular to criticize them and search for alternatives – which usually involve cost targets, activity-based costing, categorized investment appraisal, flexible or rolling budgets or a balanced scorecard approach.
The striking point about budgets and all of these so-called alternatives is that corporations should be using all these things in conjunction anyway. I do not know about you, but I would not want my performance to be measured on how well I controlled spending on office ...
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