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Time to Revisit Business Forecasting Strategy?

A company may have to reconsider annual strategies in the middle of the year.

As 2011 draws to a close, many CFOs and corporate boards are likely starting to put together their annual plan and budget. But as American Express OPEN Forum notes, it can be more difficult for enterprises with revenues and performances that vary by month to create a strategy that is in any way correct or realistic.

For those groups, it may be necessary to revisit their strategies and forecasts on a more regular basis - either quarterly or whenever there is a major disruption to or development in their operations. In that situation, a rolling budget may be a better option, since the organization is not saddled with a game plan that will not help them expand, and which could even hold them back.

"Another great feature of the rolling budget is that you always have 12 months forecasted with your most recent and valid assumptions, plans, strategies and tactics," the outlet asserts. "When most companies use a static budget, the forward-looking nature of their predictions gets shorter as the year transpires."

Indeed, corporate groups are not the only ones that are trying to add a little more flexibility to their strategies. The New York state legislature is no stranger to this challenge. As the Buffalo News reports, lawmakers may need to conduct a special session to create a new budget plan, which took a hit with the recent economic turmoil. 

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