The traditional budgeting process can be a challenging for many organizations, as it may not clearly facilitate goal or financial tracking. The traditional process may tend to highlight amounts that are out of control of managers that can lead to misunderstandings between departments.

Organizations need to be able to track budgetary requests to specific objectives, priorities, and outcomes. As a result, managers increasingly must look at the budgetary process strategically rather than look only at the previous year's results. The use of linking performance, organizational activities, key performance indicators (KPI) and metrics can assist an organization with its strategic initiatives.

The importance of Cash Flow Management is important for any organization. Organizations need to carefully monitor their cash outflows, and inflows in order to ensure that they are able to meet their ongoing obligations. We often review cash flow of an organization including aspects that have an impact on the cash flow is managed. There are several ways in which an organization can better manage its cash flow situation. We will briefly discuss a few within this post that includes Accounts Receivable (A/R) and Accounts Payable (A/P) management..

With Zero-Based Budgeting (ZBB) every line item will be required to be justified in order to be approved. It is an approach to increasing accountability to costs, improving cash flows, and improving awareness of expenditures during the budgetary process. ZBB can be used to align the operations with the strategic goals of an organization. ZBB starts the budgetary process fresh rather than focus on variances in previous budgets. As a resulting emphasis is placed on utilizing current resources effectively in order that the organization's operations are aligned more strategically with its operations. The process ensures that revenue and expenditure items are relevant and measurable.