Weaknesses of traditional budget

1. Inefficiency in time consuming

Traditional budgeting consumes use too much time and too many
management resources. So there is some company think that worth
to spent time in the budgeting process. Traditional budgeting spends
so much time because of the use of spreadsheets. Even though they
are normally use it but spreadsheets have disadvantages such as:
Prone to data entry errors
Version control issues
Difficulty in devising accurate formulations
2. Costly
Even through, nowadays developments are high quality and fast
computer networks, the process of the budgeting still remains to be
expensive. When the budgeting remains expensive the cost is high
for company to continue use this budgeting.

3. Traditional budgeting is limited

Traditional budgeting has insufficient of external focus. Traditional
budgeting is less focusing on strategy and is always has conflicting.
Besides that, it is time consuming and costly and also limit
responsiveness and flexibility, whereby this is not good for economic
uncertainty situation.

4. Low change responsiveness

Most businesses have an annual budgeting cycle and this annual
budgeting will be outdated soon after it has been created. Reviews
are not conducted regularly enough to take change. Furthermore,

budget reviews always take longer than needed, which defeats the
purpose of change adaptation.
5. Failure to motivate desirable behaviours
The traditional budgeting system fails to motivate people in their
companys interest as:
It encourages gaming and unprofessional attitudes in
budget cost centre managers
It strengthens bureaucracy and vertical control so making
people feel undervalued
Instead of enabling knowledge sharing, it reinforces
departmental barriers

6. Disconnection from strategic plan

The manager always misses the strategic purpose of budgeting.
Traditional budgeting process focuses on cost reduction rather than
value creation, which means strategic initiatives are unjustly lower
priorities.

7. Budget purpose use wrong

The use of budgeting for communicating corporate goals such as
setting objectives, continuous improvement and others but actually
the original purpose of budgeting as a financial control mechanism.