THE METHODOLOGY OF IMPLEMENTING THE “BEYOND BUDGETING” SYSTEM IN A COMPANY

The fast-changing world and business environment of today present constant new challenges to executives, forcing them to always monitor operational results in order to avoid financial trouble and bankruptcy risk. Even though budgets help manage resources and achieve company goals to an extent, current budget systems no longer serve the needs of the current business environment and therefore are an obstacle to effective business management. Instead of using budgets the “beyond budgeting” system is proposed, the benefits and advantages of which are discussed in scientific literature. Despite obvious advantages it is rarely implemented in businesses due to a lack of comprehensive guidelines and methods for its enactment. Study object – the “beyond budgeting” system. Study objective – to create a “beyond budgeting” implementation method. To achieve this objective the following goals are set: examine the aspects of budgeting systems and analyze the weaknesses of budgets created by businesses; examine the aspects of alternative budgeting system and analyze its strengths and weaknesses; to set the required changes during the implemention of “beyond budgeting” system; to set the main methods used in the installation process of “beyond budgeting” system. The scientific literature analysis enabled to identify the flaws of budgeting systems and the strengths and flaws of “beyond budgeting”. Based on scientific literature and studies of practical implementation examples, a “beyond budgeting” implementation method was created. It can be used in businesses of varying size. With its help, businesses can abandon budgeting systems and switch to “beyond budgeting” – a system that serves current market needs. DOI: https://doi.org/10.15544/ssaf.2014.0