FP+A Explainer
Is it normal to approve budgets you don’t believe in?
Yes. It’s more common than many want to admit. According to Hypergene’s Confessions of a Nordic CFO, 7 out of 10 Nordic CFOs have at some point approved a budget they did not fully believe in. This rarely happens due to a lack of analysis, but because circumstances change faster than the budget process can keep up.
Why this happens even in high-performing organizations
This is not a competence issue. It’s a structural one.
The budget becomes a process, not a decision-making tool
When the budget becomes an administrative formality rather than a living management tool, a gap forms between what is planned and what actually needs to be decided.
Assumptions become outdated quickly
When the pace of change is high, assumptions have a short shelf life. A budget can be “right” on the day it is approved — and still wrong shortly thereafter.
The impact on decision making
When the budget loses credibility, three things tend to happen:
- People negotiate numbers instead of discussing choices
- The forecast becomes a control mechanism rather than a decision tool
- The finance team gets stuck in deviation management
What Nordic CFOs say
Confessions of a Nordic CFO highlights a reality where trust and tempo are critical. When the budget loses credibility, it becomes a static document rather than a guide for decisions.
Related questions in FP&A Explainer
- When are spreedsheets no longer enough for FP&A?
- Why don’t CFOs fully trust their forecasts?
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