Which budgeting method involves planning for future revenue and expenses over a multi-year period?

Strategic budgeting is a method that focuses on long-term goals and objectives, allowing organizations to plan their future revenue and expenses over several years. This approach typically aligns the budget with the overall strategic plan of the facility, ensuring that financial resources are allocated toward initiatives that support the organization's mission and vision.

In strategic budgeting, projections are made based on anticipated market conditions, expected growth, and specific initiatives, which facilitates comprehensive planning across multiple years. This method contrasts with other budgeting approaches that may focus on shorter time frames or incremental changes from previous budgets rather than proactive long-term planning.

Other budgeting methods, such as incremental, zero-based, and capital budgeting, serve different purposes. Incremental budgeting tends to adjust previous budgets based on new information or expected changes, focusing mainly on short-term budgeting. Zero-based budgeting requires each budget item to be justified from scratch, which can be resource-intensive and may not inherently focus on future forecasting over multiple years. Capital budgeting, while essential for planning large long-term investments in facilities and equipment, primarily assesses the feasibility and financial justification of specific projects rather than serving as an overarching budgeting approach for all revenue and expenses over a multi-year horizon.