When planning for the upcoming year, CFOs should treat budgeting and forecasting as standalone pieces of the financial puzzle.
Michael Paull - CFO.com
"In many cases, performance relative to the budget drives incentive compensation, staffing decisions, and many other decisions and outcomes. Moving the goalposts during the game is not a good idea."
In this article:
1. So, what do you do when your vice president of sales or business unit leader calls for a budget revision?
2. Unlike the budget, the forecast can and should be updated often.
3. The forecast should tell you where you will likely end the year. The budget ideally would tell you the same but is only as good as when it was compiled and approved.
4. When creating the budget, you used your best knowledge at the time. The forecast, however, should always be up to date.
5. Variance analysis will be instructive in determining where you were off base so you can improve the budget process next year.
Read the full CFO article here: https://www.cfo.com/strategy/2022/10/budgeting-forecasting-revision-visibility-goal-setting/
Ramesys Global:
Ramesys is an all-in-one budgeting, forecasting and reporting platform, purpose-built for the mining industry, that offers complete cost visibility across the entire organisation.
Our goal is to make it easier for mining companies to achieve a transparent understanding of their cost performance, develop a cost-conscious culture and create a single source of truth that helps key stakeholders make better decisions, faster.
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