Disadvantages Of Traditional Budgeting System

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Executive summary: Any financial department within a company required to evaluate the company performance and require do analysis and create the budgeting for the company. Budgeting is a plan for the company’s incomes and expenditures that the financial department can use as a guideline for plans for actions regarding meeting the vision. There are two budgeting system;  Traditional budgeting system  Zero-based budgeting system The disadvantages of using traditional budgeting system;  Time consuming. It may require long term process which can take several months in order to create the budget. however, it requires many management resources  It is fixed. Which means once the budget is out there no alteration or changes made. Sometimes…show more content…
It requires managers to plan. It needs operational and financial resources information for decision making…” one of the main result of the traditional issues is the high possibility of having surplus of the funds. Unlike the Zero based budged method, requires no review for the past activities. However, each department is responsible for creating its own budgets and each manager is responsible for the justification and the purpose of the intended amount of the…show more content…
• It requires many resources and specialized training as well for planning effectively. There are number of measurement performance tool. One on of the best is the balanced scorecard. The Balance Scorecard strategy BSC) is the strategic plan performed by the managers for the performance measurement .The is a method to overcome the inaccuracies of the traditional system which known as ‘’…balance scorecard BSC is like the dials in an airplane cockpit; It gives managers complex information at glance’’ (Kaplan and Norton, 1992). So, the features of the BSC is the combination of vision and strategy of the organization.th BSc consists of main four perspective; financial perspective, customer perspective, internal business perspective and learning and growth perspective. • Financial perspective; the image of the organization for shareholders; for instance, the long term objective for the business such as, Revenue growth, Cost reduction and Investment strategy. • Customer perspective; which include customer satisfaction, profitability and market and account

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