Strategic Budgeting

What is Strategic Budgeting?

Strategic Budgeting is a budget prepared by the companies that takes into consideration long term objectives and costs that take more than one year to achieve. This involves preparing multiple budgets and forecast for short term costs that are aligned with the long term. And thereafter allocating and categorizing funds depending on the activities.


Strategic Budgeting

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Examples of Strategic Budget

Strategic Budgeting Process

There are four dimensions we need to look for when we are in the process of converting the goals into a budget. That is, Objectives, Strategies, Measures, and Targets. Let us define these step by step, which helps in designing the strategic budget.

  • Objectives This defines what exactly we are trying to achieve, which are our goals.
  • Strategy The second step would be to develop a strategy to achieve a set goal.
  • Measures After implementing the strategy, we need to track and evaluate its performance using relevant standards.
  • Target Finally, the goal is the place where we aim to be by the end of the period.

In the whole process, we need to allocate funds to all the functional departments and help them achieve their objective to achieve the final target. Significant steps in designing the budget would be as follows –

  • Forecast the short-term cost and factorize them in the budget
  • Allocate categorized funds depending on the activities
  • Make multiple budgets for the short term, which align with the long term ones.


A Strategic budget is an essential element for any organization. It provides a long-term road map for the success of the company. A company with a long term vision and goals have to be very constructive and accurate in designing such a budget.

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