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1. You haven't accounted for inflation & rise in costs. So your fixed budget won't go as far as the previous years.
2. You don't have any flexibility to deal with change in the environment (emergencies, personnel, competitive pressure).
3. Your competitors know your weak point; they can outspend you.
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What is the disadvantage of budgeting?
Distortion is caused by cash budgets. Influence of non-financial factors will also affect the final decisions when it comes to cash budgets. Cash budgets are vulnerable to manipulations. The major disadvantage is that cash budget relies on estimates.
What is the disadvantages of cash budgets?
Distortion is caused by cash budgets. Influence of non-financial factors will also affect the final decisions when it comes to cash budgets. Cash budgets are vulnerable to manipulations. The major disadvantage is that cash budget relies on estimates.
What is the difference between governmental annual operating budgets and capital budgets?
annual operating budgets include estimated revenues and appropriations for expenditure for a specific fiscal year. Capital budgets control the expenditures for construction projects and fixed asset acquisitions
What is the Advantages of fixed budgets?
fixed budget is the budget whose all estimation is not changed after making this type of budget for more knowledge of budget == == == == == ==
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When costs are fixed, you know what they are from month to month and can budget accordingly.
What are fixed and flexible budgets?
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What is the disadvantage of budgeting?
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