Annual budgets and rolling budgets use in UK and Australian firms

Journal article

The purposes and uses of annual budgets have been questioned for decades. The metareporting and analysis of operational budget trends outside North America have been sparse and academically under-reported in the past 20 years. Innovations such as the rolling budget have challenged and/or supplemented traditional annual budgets, while organisations increasingly demand more flexible budgeting approaches. Our research examines the current state of budgeting practice relating to both rolling and annual budgets across a surveyed sample of 380 UK and Australian firms. We find that despite concerns about its applicability, the annual budget overwhelmingly remains a critical planning and control tool, but functions as a performance evaluation tool to a lesser extent. Nearly a third of firms use rolling budgets, for various reasons including planning and control, aligning with annual budgets. These findings hold across business-as-usual operations, not only during economic crises. We find that of the firms using annual and rolling budgets, 75 percent indicated they are equally important, with both budgeting forms used jointly rather than as substitutes. This is an important contribution not reported in prior literature.

Authors: Bhimani, A; Sivabalan, P; Soonawalla, K; Wakefield, J

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Springer
• Journal: Journal of Management Control
• Volume: 35
• Issue: 4
• Pages: 509–561
• Publication date: 2025-01-18
• Acceptance date: 2024-11-01
• DOI: 10.1007/s00187-024-00382-5
• EISSN: 2191-477X
• ISSN: 2191-4761
• Language: English
• Keywords: annual budgets; budgets; rolling budgets; hybrid systems