Paul BarnhurstFP&A Expert Empowering Finance Professionals to Excel Everday

Your business needs more than just an annual budget to succeed.

28 Aug 2024

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This is a YouTube video titled "Your business needs more than just an annual budget to succeed." It features a speaker discussing the limitations of annual budgets in financial planning and analysis (FP&A), emphasizing the need for continuous planning in the context of rapid technological growth and generative AI. The content is part of a podcast series on FP&A, financial modeling, and the future of finance, recorded in August 2024.

Annual budgets are the worst creation to ever come out of FP and A. And if we are the people that invented them, shame on us. But realistically, the minute you create a budget, it's meaningless. And the faster technology grows, the more we start leveraging machine learning. And now we're in this generative AI boom. There is just no place for something that is stagnant for a year, let alone four or five years. And so I like to talk about a continuous plan as opposed to an annual budget. Now I have to throw the accountants under the bus. Sorry, accountants. I love you all, but you love to create controls around analytics versus an annual budget. That's great. You're going to find the occasional red flag where something is 20, 25, 30% off of a fixed budget, and it actually is a signal that we need to look at. But generally speaking, it's simply because the business has changed.