Elle Meyer

ACC548

Dr. Robinson

17 March 2023

Flexible Budgets with COVID-19

For this week’s article, I read “Budgeting for COVID-19 Uncertainties” by Kevin

Omahen, with a focus on Not-for-Profit entities. Kevin focused on representing how a time of

uncertainty can force a company to change the way they planned their year, especially

financially, as it relates to the budgeting process (Omahen, 2021). As many organizations

typically stick to a static budget at the beginning of the year, rolling or flexible budgets may be a

better option for the future.

Kevin suggests the importance of a flexible budget compared to the opposition, in which

companies can analyze the figures to grasp a better understanding on their continuous financial

position (Omahen, 2021). Timely responses and better decision making are a direct result of

flexible budgeting in an organization. Omahen explained how many Not-For-Profits have

experienced serious implications, including losing government funding and the ability to

generate donations from the outside community (Omahen, 2021). With this idea, reforecasting

an organizations budget can help them determine if they are capable of staying a-float during a

pandemic, or any other time of uncertainty. Further, the article expressed how important it is to

stay on top of the numbers as well as to continuously monitor variances to understand operations

(Omahen, 2021). Not only has the pandemic impacted revenues for organizations, but

additional expenses may have been incurred to adapt to the need for change. This is an essential
reason to create a flexible budget within your Not-For-Profit, or any organization, and review the

numbers more than once a year.

As Omahen mentioned, variance analysis is important for many reasons, especially when

learning how your organization has been impacted and trying to figure out why. Variance

analysis with significant changes can help companies determine guidance on issues, such as less

government funding, donation upkeep, and additional expenses incurred. Not-For-Profit

organizations can utilize the expertise of managerial accountants to create rolling flexible

budgets to better serve the organization. Omahen sums up the article by stating, “Budgets are

not a tool to set and forget” (Omahen, 2021).

Managerial accountants may begin to find themselves more involved in the entire

budgeting process as companies may need to change their outlook on static budgets. As

businesses are faced with constant uncertainty and show signs of a struggle to stay afloat,

businesses will be prone to decreasing costs when they can. In this case, instead of maintaining a

static budget for one annual period at a time, managerial accountants can find themselves

calculating and analyzing flexible budgets as well as explaining variances to organizations with

continuous modifications. This is an important role in helping these companies develop new

strategies as well as goals to move forward and analyze effectiveness.

If these organizations are proving business processes have been positively impacted after

implementing rolling flexible budgets, managerial accountants may find themselves shifting their

role with budgeting duties. To maintain performance in an economy, post COVID, managerial

accountants should continue to provide flexible budget variances with an open mind to constant

adaptation. Overall, flexible budgets are becoming more prominent and necessary with constant

uncertainties, and managerial accountants should prepare for this fundamental budgeting change.
 Works Cited

Omahen, K. (2021, April 14). Budgeting for covid-19 uncertainties for not-for-profits . ORBA.
Retrieved March 17, 2023, from https://www.orba.com/budgeting-for-covid-19-not-for-
profit/