Rolling budgets

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A rolling budget is usually prepared on annual basis but divided into controlling accounting periods as on monthly or quarterly basis it is kept and revised on a continuos basis by adding a future accounting period's budget to replace a budget for an accounting period that has expired .
1. The planning process repeated at the end of each control period
Suitable if
1. accurate forecasts cannot be made. For example, in a fast moving & competitive environment.
2. or for any area of business that needs tight control.
Advantages
1. suitable for a competitive environment
2. Up to date budgetary system
3. very low level of uncertainty
  1. so a accurate budget will be produced at the end
Disadvantages
1. its costly and time consuming
2. May demotivate employees if
  1. they feel that they spend a large proportion of their time budgeting
  2. if they feel that the budgetary targets are constantly changing
3. An increase in budgeting work may lead to less control of the actual results

Resource summary

	Created by Shahid Musthafa about 11 years ago