Budgeting Beyond Reason

Remember when chaos still, somehow, had logic? Those were the days! Now, situations reverse overnight, markets swing wildly on a whim, and forecasting feels like fiction. Yet amid this turmoil, businesses must still move forward.

Writing these columns over the years has been a useful exercise in looking at the bigger picture every quarter, and then considering what that means for accountants and their clients. It feels like a quarterly budget review, with adjustments to forecasts as new information comes in and trends start to emerge.

As a result, I've consistently been advocating for more flexibility and adaptability in our profession. This is not surprising when you look at macro trends and the evolution of the business environment: data volumes are rising and market trends are speeding up; Covid came along and accelerated these trends; and finally, 2024’s geopolitical uncertainty added an extra layer of chaos and change. A business’s ability to turn on a dime was a clear competitive advantage.

So far, so good. And, amid the change, there were almost always reasons to be optimistic. History has shown that innovation is likely during tough economic and political times. And the companies that move the fastest grab these opportunities most successfully.

But then 2025 happened. And this time things were very different. Previously, there was always an internal logic to the unprecedented conditions we found ourselves in. Things had changed, but we still had a template for what was going on. Market fundamentals and the rules of engagement, for the most part, remained familiar.

Not anymore.

This started with the rise of isolationism and the potential end of globalisation, which I wrote about in my last column. But now layer on the on-again-off-again-who-knows-what’s-next trade wars, and subsequent market volatility and political instability, mixed with the mindset of the people driving these events.  There doesn’t seem to be a playbook anymore. How can companies make strategic investment decisions when, on a whim, events can take a 180-degree turn overnight?

But businesses that pressed pause during 2024 can’t stay in that holding pattern for much longer. Moving forward is inevitable: major capex might be postponed, but opex and smaller strategic initiatives will have to proceed for the companies to stay relevant.

And so, we arrive back at this conclusion again. Today, with so much uncertainty, and so little precedent and logic to guide us, our need to adopt flexible financial systems is more urgent than ever. As is sitting with the discomfort of knowing that perfect forecasting and totally accurate budgeting are impossible, but that we must do what we can to prepare our clients for multiple future scenarios.

Are your financial systems ready for a world without logic?

Consider these questions: Do you still have bodies at desks and fingers on keyboards as part of your budget process? Are you manually extracting, importing and manipulating data? How quickly can you update forecasts when circumstances change overnight? Can budget holders recalibrate without finance department intervention? Do your tools enable the simultaneous evaluation of multiple scenarios? How easily can you incorporate insights from across the organisation? Can leadership access real-time financial insights with a click or a tap?

As published Accountancy SA - July 2025