When preparing the budget for the coming year , the numbers are already on the previous year’s budget is often used as a benchmark . Even if you scrutinize all the assumptions and look at each number and the number presented , you will probably get that number and that number is only slightly different from last year .
Why did it happen ? As the number and that number keeps you glued , consciously or not affect the way you draw up a new budget .
Rather than fixate on past budgets and budgeting rules that have been continuously applied , try to apply other standards , which are based on different facts .
Define the non- historical criteria you . Look for the data that has been proven competitor objective , such as benchmarking . Then place the model based on these criteria .
Ask if you and your team do not know the performance of this year but only relied on these objective criteria , what targets to be set ? Use result / output of the model was to criticize existing conditions or upcoming budget is prepared based on the previous budget .