They are completing the last preparations and making growth plans for the new year. Most are looking to review their budgets every month in order to incorporate risks that cannot be predicted ^Within this context, they prefer to use the “rolling forecast budget” method for budget management. Companies with “cautious” plans for 2014 are adopting dynamic budgeting systems and indicating that they will exercise greater control in the new year. It is striking that the majority are still looking to double digit growth next year...
CONTINUALLY ADJUSTED BUDGETS
Rolling forecast budgets generally allow companies to review their budgets at the beginning of each quarter. As a result, they are able to continually adjust their budgets according to changing business conditions. Experts say that this kind of budgeting encourages companies to plan and pursue opportunities continuously rather than once a year. Some companies make 12-, 15- or even 18- month rolling forecasts. In some companies, these forecasts are revised every month. Doğtaş is one of the companies that will use this budgeting method. Doğtaş Board Chair Davut Doğan says that the rolling forecast method will enable them to revise their budgets and targets and keep them updated.
Dimes General Manager Ozan Diren says: “The first thing that we do before every financial year is to make a master budget for our operating plan. The rapidly changing structure of the sector means that the master budget that has been prepared is revised every month according to new forecasts that have been formulated in accordance with market conditions, competition, season factors and what has happened in the previous period. In brief, we prepare a rolling forecast budget.”
WHY IS IT PREFERRED?
So why do companies prefer a dynamic budgeting system? DHL Supply Chain Genel Müdürü Hakan Kırımlı says: “In this way we both develop our projections for as long a term as possible and try to be always one step ahead by preparing ourselves in a dynamic manner for all short-term factors.”