Moving beyond Beyond Budgeting: A Case Study of the Dynamic Interrelationships between Budgets and Forecasts

Figures & data

Table 1. Overview of interviewees

Number	Bank Position	Interview Date	Duration (min.)
1	Head of Accounting	10/07/2020	60
2	Business Controller	10/07/2020	90
3	Business Controller	10/13/2020	90
4	Chief Risk Officer	10/14/2020	90
5	Head Of Credit Risk and Controlling	10/30/2020	90
6	Branch Manager A	11/04/2020	90
7	Internal Auditor	11/11/2020	90
8	Chief Internal Auditing Officer	11/11/2020	90
9	Financial Employee at The Sales and Chain Office	11/12/2020	90
10	Chief Financial Officer	11/13/2020	90
11	Branch Manager B	11/18/2020	90
12	Branch Employee B	11/18/2020	30
13	Middle Branch Manager B	11/18/2020	30
14	Branch Manager C	11/19/2020	90
15	Middle Branch Manager C	11/19/2020	60
16	Middle Branch Manager C	11/19/2020	60
17	Branch Manager D	11/23/2020	90
18	Branch Employee D	11/23/2020	60
19	Non-Executive Board Member	11/26/2020	90
20	Non-Executive Board Member	11/26/2020	90
21	Non-Executive Board Member	11/26/2020	90
22	Non-Executive Board Member	11/02/2021	90
23	Chairman of the Board of Directors	11/30/2021	90
24	Executive Officer	12/10/2021	90
25	Executive Officer	12/13/2021	90

Table 2. The roles of control elements in the planning and control cycle during the three stages

	The three phases
Purpose	Before budget abandonment	During budget abandonment	After budget reintroduction
Planning	Budget	Forecast	Forecast
Revenue	Bottom-up aggregation of negotiated branch budgets	Statistical projection based on macroeconomic factors integrated with executives’ knowledge of decisions influencing financial parameters	Quarterly updated forecasts based on statistical projection
Cost	Bottom-up aggregation of negotiated branch budgets	Judgment by relevant managers	Forecast (based on judgment by relevant managers) fixed for the fiscal year evolves into a budget for control purposes
Profit	Based on the revenue and cost budget	Based on the revenue and cost forecast	Based on the revenue-forecast and cost-budget
Control	Budget	Forecast	Forecast and budget
Revenue	Variance analysis of budgets compared to actuals	Forecast evaluated quarterly against forecast from last quarter	Forecast evaluated quarterly against budget and forecast from last quarter
Cost	Variance analysis of budgets compared to actuals	Cost projection evaluated against actuals	Forecast evaluated quarterly against budget and forecast from last quarter
Profit	Monthly variance analyses of actual versus budget numbers	Quarterly analyses of actual versus forecast numbers	Forecast evaluated quarterly against budget and forecast from last quarter
Market guidance	Budget	Forecast	Forecast
Yearly	Expected profit reported based on aggregated budget	Expected profit interval reported based on forecast	Expected profit interval reported based on forecast when the annual report is disclosed
In-year	Systematic, quarterly adjustments of expectations accounting for year-to-date actuals	Systematic, quarterly adjustment of expectations accounting for year-to-date actuals	Immediate adjustment of expectations when updated forecasts deviate from present forecast according to legislative requirements

Figure 1. Headlines in quarterly reporting

Figure 2. Headlines in monthly reporting