Anders Liu-Lindberg en Directors and Executives, Economists and Finance, Accountants Senior Finance Business Partner • Maersk Line A/S 18/5/2016 · 2 min de lectura · 3,6K

Don’t Tell Me You’re Still Doing Budgets?

You’re about to embark on a long journey that will take months of hard work, long hours, heated discussions while some alliances will be broken and new ones will be formed. At the end of it all when you have your goal in sight you suddenly see a storm coming out of nowhere which moves the goal in a completely different direction. What do you do now? Continue towards the original goal or change your course to follow the moving target? 

Doing budgets is like a long walk to the Promised Land 

Above sounds like quite the adventure but in fact, it’s merely the description of your budget process. It takes months to complete, you face off in tough discussions with business leaders about a few dollars here and there and at the end of it all when you present your shiny numbers to management they say. 

“Thank you for the presentation BUT that’s not exactly the number we had in mind…”

So you go back and re-do the budget to make it fit what management wants even though you know it will never materialize. In any case, the number is done and signed off when suddenly oil price drops 30%, USD appreciates with 15% and all raw material prices drops because China is growing much slower than anticipated. Granted there are winners and losers in every scenario except your budget which loses out every time. Whether it means you will never reach the budget or will grossly over perform doesn’t really matter as the purpose of your budget (being a target, a realistic forecast and a resource allocation) is flawed no matter how you twist and turn it. 

Just go Beyond Budgeting 

I already warned you that this would happen in “3 Reasons Your Budget Is Already Outdated” but since you are reading this you probably chose to ignore my advice.