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Total Impact of Best Practices on the Budgeting Function
activities in which those people are normally engaged will stop while they are
traveling to and from budget meetings, so there is an added degree of waste.
Technology can be used to eliminate these costs. The latest innovation is to
use video conferencing to hold meetings, thereby avoiding all travel costs and
only taking up people’s time for the duration of an actual meeting. The range of
options for a video conferencing system runs from a company-owned video pro-
duction room that has projection screens and television cameras down to a small
device that mounts on top of one’s computer, allowing for transmission of the
image of whomever is sitting in front of the computer. The larger and more com-
plex option is recommended for the budgeting chore, since it has the added fea-
tures of allowing for the video transmission of documents to other sites, much
better video quality, and the option to have simultaneous conferences with up to
two other locations.
The main problem with using a quality video conferencing system is that it
can cost $100,000 per location, though this cost is rapidly coming down. The
smallest video units only cost about $100, though the video quality is quite
poor. One must choose the system that fits a company’s ability to pay (which
may be high if there are other applications to which such a system can be put,
such as for the transmission of engineering meetings). It is also possible to rent
video conferencing centers, which may be considerably less expensive than
purchasing one. This is an especially good option if there are few other uses to
which a company-owned video conferencing center can be put. In addition,
there must be very tight scheduling of meetings, requiring everyone to be on-
line at the same time. Otherwise, some very expensive equipment will be tied
up while waiting for someone to arrive at his or her conferencing site. The
underlying problem is system cost, so a careful analysis of all expenses is nec-
essary before buying a video conferencing system.

Cost: Installation time:

TOTAL IMPACT OF BEST PRACTICES
ON THE BUDGETING FUNCTION
Most of the best practices discussed in this chapter are noted in Exhibit 5.4,
where they are clustered around the three main budgeting activities—creating the
budget model, implementing it, and using it. Most of the best practices impact the
creation of the budget model, either by increasing its simplicity or by improving
the information that goes into it. For example, reducing the number of accounts
and budgeting by groups of staff positions reduce the size of the model, while
using activity-based budgeting improves the resulting information. Other best
practices improve the ability of the company to quickly and effectively input data
into the budget model or to discuss changes to it, either through video conferenc-
ing, a budget procedure, or on-line budget updating. Finally, several methods are