In a recent article on how to apply a Rolling Budget System, in the Journal of Accountancy, Neil Amato explored how Tim Quinn, the Northern Quest Resort & Casino’s vice president of Finance, dealt with the evolving needs of his business with respect to budgeting. Over the years, he found it difficult to craft and utilize a budget that made sense for the business. Given the long and arduous process of producing the budget, which he tells the Journal of Accountancy usually took about 5 months, he and his accounting team usually ended up with a budget that failed to reflect the current state of the business. Wherever they were when they started building the budget was not where the business was when they finished producing it.
In order to combat this, Quinn tells the Journal of Accountancy that he had the accounting team move to a rolling budget forecast. Instead of creating a budget year over year, they created a document that reflected changes in the company’s 15-month forecast based on quarterly results. Doing so has allowed the company to stay more reactive to changes on the ground and to better address problems and budget shortfalls when they crop up.
The best part is, this same rolling budget system can be applied to personal finances!
Contact us today with any questions you have about implementing your rolling budget.