Short-term financial planning practices: A survey of current British practice

This paper reports on a survey, conducted among member companies of the Financial Control Research Institute UK, of methods of budgetary control and short-term financial planning which were in use between 1985 and 1988. A number of comments on these practices are offered, especially where the literature of budgetary control seems to be at variance with practice. The companies have brought their budgetary control procedures closely into alignment with their strategic planning processes. Also, a substantial number of companies have adopted the practice of preparing a revised budget (though they prefer not to call it that) at quarterly intervals during the year. A significant growth in the use of information technology in the budgetary process was observed, especially among the larger, more profitable, more research dependent, and more decentralised companies. Preliminary evidence for a link is established between the conventional measures of corporate success and the use of a new role for a budget, in which the budget is a much more continuous process, instead of the rigidly annual affair that has been common in the past.