Most businesses seem to have a budget setting period towards the end of each year where the following year’s budgets are prepared (periodic budgeting). other businesses, however, have a ‘continual budgeting’ approach where, each month, a new month’s budget is prepared to replace the month that has just passed, thereby ensuring that, at all times, a budget for a full planning period is available.
What are the advantages and disadvantages of each of these approaches?