Let’s look at the budgeting process now.
Go through pop-ups
We can see that the process is continuous. We are constantly creating, monitoring and reviewing our budgets
The budgeting process does not stop once the budget is created
Ongoing review of the budget and actual results is extremely important
At the end of a period, we must compare the budget-to-actual results
Differences arise because:
Budget was poorly conceived
Business conditions have changed since the budget was initially prepared
The company’s management has done a poor or great job managing the company
As we mentioned, the process is continuous
Go through bullets 1 to 4
Qs: Any idea why there would be differences between what was budgeted and what the real results were?
Go through bullets 5