ROLLING BUDGET Meaning and
Definition
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A rolling budget is a type of financial plan that is continuously updated and revised on a regular basis, typically quarterly or monthly. This budgeting approach allows organizations to make efficient financial forecasts and adapt to changing economic and market conditions.
In a rolling budget, the budget's time horizon extends beyond a single fiscal year, usually covering a specific number of periods into the future. As each period is completed, the next one is added to the budget, resulting in a continuous "rolling" process. This differs from traditional budgeting approaches that typically follow a fixed annual cycle.
The key advantage of a rolling budget is its ability to provide more accurate and up-to-date financial projections. By constantly revising and updating the budget, businesses can incorporate the most recent financial data and market trends into their plans. This enhances their ability to respond to unforeseen circumstances and make informed decisions in a timely manner.
Furthermore, rolling budgets help to improve the management of resources and allocation of funds. By regularly reviewing and adjusting financial targets, organizations can identify areas of overspending or underutilization and take corrective actions promptly.
Overall, the rolling budget approach facilitates better financial planning, control, and decision-making by providing an ongoing projection of future financial performance based on current information. It promotes flexibility and agility in adapting to changing circumstances, ultimately improving the overall financial management of an organization.
Common Misspellings for ROLLING BUDGET
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Etymology of ROLLING BUDGET
The etymology of the term "rolling budget" can be understood by examining the origins of its individual components.
1. Rolling: The word "rolling" is derived from the Old English word "rollian", which meant "to roll, revolve, turn on an axis". It has extended its meaning over time to refer to a continuous, ongoing, or dynamic process.
2. Budget: The term "budget" has its roots in the French word "bougette", which originated from the Latin word "bulga" meaning "leather bag or pouch". In medieval times, budgets were documents containing financial plans and estimates kept in a bag or pouch. The term eventually expanded to include any plan or estimate of income and expenses.
