Beyond Budgeting Vs. Traditional Budgeting

1862 Words Mar 11th, 2015 8 Pages
Beyond Budgeting
Traditional budgeting processes are increasingly being viewed as obstacles to progressive managers in the control and management of their companies. Financial statements made using traditional procedures are often too complex, long, inflexible, cannot be adopted in the market quickly, and demotivates people in organizations in their performances. Traditional budgeting also requires a lot of effort to make hence the need of new budgeting systems. This is how beyond budgeting concept came into being as accountants sought for new accounting strategies that are more vibrant and able to steer business organization to success through focused budgets. The changing business environment has warranted the new budgeting strategies. Management of businesses no longer needs centralized management of their affairs. The reason is that the businesses need to adopt measures and operational plans that enable various functional managers to react quickly and appropriately to the markets.
Beyond budgeting (BB) is an accounting idea that requires companies to move beyond the traditional budgeting processes because of the many flaws that are inherent in budgets. The concept of beyond budgeting uses a number of techniques like market related targets or rolling forecasts that can be used instead of traditional budgeting procedures. The concept requires accountants to abolish most of the traditional procedures in order to increase the management control of organizations through…
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