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The Importance of Budgeting-to-Plan - Instead of Planning-to-Budget

  Arthur F. Rothberg, Managing Director, CFO Edge, LLC  
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  Article Summary  
The current Congressional budget and deficit showdown is informative for business leaders in that it illustrates something important that is often overlooked: the reason why our federal government is so deep in debt in the first place. And that reason is simple: Our government spends far more money than it raises in revenue.

A CFO looking at this situation might say that when it comes to budgeting and spending, our federal government has things backward - they are planning-to-budget, instead of budgeting-to-plan. In other words, the government makes spending plans that don’t take into account how much money is actually available to spend.

This article looks at the business parallel and the way businesses sometimes move forward without grounding action in a budgeting-to-plan approach. Reviewed are advantages and five questions to ask to ensure initiatives are based on realistic budget and income forecasts.

An outsourced CFO services provider can help your clients budget-to-plan by offering an objective analysis of the various opportunities and their associated costs.

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