Integrate Business Forecasting With Cost Analysis and Avoid Common Budgeting Pitfalls

Budgeting and forecasting are painful processes in businesses and nonprofits today. They are disliked because they are time-consuming, often involve defensive responses from staff, and seem to do little real cost management in a rapidly changing business environment. Participants in these processes are often correct in their critiques, but the problems they identify are not inherent in the processes. They are the result of:

1) Competing purposes in the forecasting process, especially the annual budget;
2) Having poor tools or confusing the process with the tools;
3) Failing to base the forecast on cost drivers;