Linking the Budget to the Balanced Scorecard

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A new way of budgeting

Mei Po celebrates meeting her yearly budgeting goals as she hangs a banner for the New Year.

For the most part, traditional budgeting has focused on the financial performance of an organization. However, many of these financial performance measures, designed to indicate the success of budget plans in contributing to increasing profits, were developed for an industrial world.

Times have changed, and new ways of approaching planning and performance evaluation have changed as well. With information technology and global markets becoming the model for the modern business environment and as nonprofit organizations grow in size and sophistication, organizations have to recognize and value their intangible and intellectual assets as well as the tangible assets represented in numbers on the balance sheet.

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