How much money does the company you work for spend on planning and budgeting?

February 07, 2008

How much money does the company you work for spend on planning and budgeting?

On the Beyond Budgeting Round Table website, a number of reasons why budgets cause problems are listed. Here is one of them:

"Budgets are time consuming and expensive. Despite the advent of powerful computer networks and multi-layered models, budgeting remains protracted and expensive. The average time consumed is between four and five months. It also involves many people and absorbs up to 20 to 30 percent of senior executives' and financial managers' time. Some organizations have attempted to place a cost on the whole planning and budgeting process. Ford Motor Company figured out this amounted to $1.2 billion per annum."

Reading this made me think of a couple of questions:

Question # 1
How much does the company you work for spend each year on planning and budgeting?

Question # 2
What is/are the most effective way(s) of reducing the costs spent on planning and budgeting and – at the same time – increasing the competitiveness of the company? Please be as concrete as you can.

Comments

deborah said…

I do not have figures but my company is spending a lot of money for the planning, a large department is responsible for planning. The planning is important to get an overall picture of what could be reached for the future but the unexpected factors should be considered to. I think the communication between the planning department and the people on the front can safe money as the people from the front can hear and feel what goes on in the market and can therefore show possible indicators. In such a way re-planning within the year could by minimized.

January 31, 2009