Budget for growth to ensure organisational success

As we enter a new financial year, most companies have been through the process of financial forecasting or budgeting.

Notwithstanding, as argued before, that a 12-month cycle may be too long a time-frame for such a process it is a requirement for various reasons. It also does provide the basis for medium-term planning.

The annual ritual of budgeting takes various forms depending on the size of the organisation. Commonly this entails reviewing past performance and estimating as accurately as possible what lies ahead.

In good times, incomes and correlating expenses are increased. In tough times, as we may be presently experiencing, these tend to take a downward trend.

Environmental, political, economical and other known factors are rightfully included in these forecasts.

There will also be some products, services or business units that are at the start or end of their life-cycle, these too will have an impact on financial performance.

However, organisations must do more than just budget for t…