In the ever-evolving world of business, adaptability is paramount. When it comes to budgeting, the choice between static and flexible budgets can make a world of difference. Let's delve deeper into each:
🔒 Static Budgets
Static budgets are like blueprints set in stone. They're meticulously crafted at the beginning of a period, outlining anticipated revenues and expenses based on fixed assumptions and forecasts. Once set, they remain unchanged regardless of actual performance or unforeseen events. While static budgets provide a sense of stability and predictability, they can be rigid and fail to account for fluctuations in activity levels or market conditions.
🔄 Flexible Budgets
Think of flexible budgets as chameleons – they adapt to their surroundings. Unlike static budgets, flexible budgets are dynamic and responsive. They're designed to adjust based on actual activity levels, accommodating changes in revenue, costs, and other variables as they occur. This real-time flexibility enables businesses to gain insights into variances between budgeted and actual performance, empowering informed decision-making and strategic adjustments along the way.
While static budgets offer stability, flexible budgets empower businesses to navigate uncertainty with confidence and seize opportunities as they arise. Check out this article by @Intuit Mailchimp to learn more https://mailchimp.com/resources/static-budget-vs-flexible-budget/ then reach out to Brixey & Meyer today to get started!