Flexible vs. Static Budgets


Flexible vs. Static Budgets

I won't give you the same information you can find in the text.  Each method has its pros and cons.  But, what I have seen in the companies that I have worked is a budget fixed for the year, and a rolling forecast for top management that gives them an idea of what to expect.  The two may not agree because they are being used for different purposes.  The forecast is for planning, and the budget allows the company to do some variance analysis that hopefully will improve methods and improve future planning.


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