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Scrap the Budget

November 30, 2009

So it’s nearly Budget time again.  What a waste of time! And money! 

How many annual outcomes have turned out exactly as Budgeted?  None!

How many Departments are now desperately and foolishly trying to spend the money, that they have been ‘allocated’, before the end of December.  Why?  Because, if they don’t spend it, they won’t get the same allocation next year.

And it is not just the State that foolishly keeps on budgeting.  How many businesses in the private sector do it as well with the same silly notions – each department spending their allocation before the year-end?

Take this example: if you were Head of the Marketing Department and your Sales budget was €500,000 per month.  Let’s suppose that you had reached your budget for the current month and you get another contract just before the month-end for €300,000.  What do you do?  Report €800,000 as contracts achieved in the current month?  Not on your Nelly!  What you do is make no mention of the new contract for €300K and you slot it quietly into the following month.  Now you’re more than half-way there towards achieving next month’s budget.  Am I right or am I right?

On and on it goes.  When are we going to give up budgeting?

Cyril McGinty

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