Total Impact of Best Practices on the Budgeting Function
Most of the best practices discussed in this chapter are noted in Exhibit 5.4, where they are clustered around the three main budgeting activities—creating the budget model, implementing it, and using it. Most of the best practices impact the creation of the budget model, either by increasing its simplicity or by improving the information that goes into it. For example, reducing the number of accounts and budgeting by groups of staff positions reduce the size of the model, while using activity-based budgeting improves the resulting information. Other best practices improve the ability of the company to quickly and effectively input data into the budget model or to discuss changes to it, either through video conferencing, a budget procedure, or on-line budget updating. Finally, several methods are available for closely linking the resulting budget model to company operations, so that most activities cannot be completed without some interaction with budget information. What all of these changes amount to is a highly efficient budgeting process that can be completed in less time than the previous budgeting system, while providing much better information to the management team.
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