Essay On Budgetary Control

853 Words2 Pages
bulb-icon

Recommended: Advantages and disadvantages of budgetary control

What is budgetary control? Budgetary control can normally be refered to a system of management control in which actual income and spending are compared with planned income and spending that is future spendings so that we can see if the plans of the business are being followed properly or not and whether if those plans need to be changed so rthat the firm can become more profitable in the future. Imortance of budgetary control in an organisation 1. To Use the Forecasting Techniques One major importance of budgetary control is that with this, we can use the forecasting techniques.Usually there are three departments that work hard for calculating best estimation of future in a firm. First the accounting department which provides old Manager makes budget and show the target of company and employees are given the powers to perform these targets that is achieve the goals and objectives. After checking the variance in budget through budgetary control process, manager can fix the responsibility of each department and its employees in a particular department .Thus it can be said that budgets help managers in integrating personnel efforts within the organization towards a common goal. By properly appropriating adequate budgets to different activities within the organization, all activities can be synchronized and all efforts can be coordinated to achieve the organizational objectives and meet the goals of the firm If budgetary control is used in company, at that time, no action will be taken before making budget. Responsible personal of company will be accountable for his action. Suppose, company has fixed the target of company's annual Sale is $ 40,00,000 after participating sales manager in the setting of this sale budget. Now, after one year, if sale is just $ 1,00,000. Thus the sale manager must say what is the reason for not selling the product up to standard level of sale. Hence the budgetary control helps firms in better utilising its resources. 4. Excel yourself After using budgetary control techniques in our business, we will definitely learn the skills of excelling because we all know that a budget is based on estimation, it may or may not be true. But continually practising of making a good budget and applying it in the organisation can help the manager learn skills and gain experience for increasing the efficiency in every company,thus meaning that managers will be getting positive approach through budgetary control. 5.Improve the communication process in the

Show More
Related

  • Hospital Budget Analysis Paper

    441 Words  | 1 Pages

    I attended the Saturday Lab 1 session discussing the Denison Specialty Hospital case study. In our session, we had a through discussion into the different budget terminology. I learned about the difference between accrual and cash accounting methods, which is based on the timing of when the revenue and expenses are recognized. I also learned about responsibility centers as an organizational unit under the supervision of a manager, who is responsible for its activities and results. In addition, the manager is accountable for the budget of the department that they head. Therefore, a centralized form of management in developing the budget because it makes easier to because the information for the department budget is located

    Read More

  • Capital Budgeting in Galaxy Science Centre

    1398 Words  | 3 Pages

    Capital Budgeting encourages managers to accurately manage and control their capital expenditure. By providing powerful reporting and analysis, managers can take control of their budgets.

    Read More

  • Durango Manufacturing Company: Accounting and Financial Areas

    2346 Words  | 5 Pages

    One must understand that the integral core of a company rests in its accounting and financial areas. The departments’ need employees with an advanced knowledge and skill set to ensure the payment of supplies and accounting on the expenditure is correctly recorded. If the accounting desk presents inaccurate spending calculations on behalf of the company, it could result in spending more than what has actually been earned; this could lead to the company not only being unable to increase in revenue, but also experience loss. It is imperative that the management of the financial department is well informed and able to make decisions by taking into account the usage of every coin stated in the expenditures, and also to know the amount of revenue the company is making so that we can plan on better strategies to improve the revenues (Lu, Madu, Kuei & Winokur, 1994).

    Read More

  • Persuasive Essay On Defense Budget

    1588 Words  | 4 Pages

    Budgeting is a familiar term to most American families. Dictionary.com defines budgeting as an estimate, often itemized, of expected income and expense for a given period in the future. In order to avoid debt, bankruptcy, or overspending it is common to create a spreadsheet of some sort tracking your spending and income. On a grander scheme, the Unites States has to budget as well.

    Read More

  • Essay On 2016-17 Federal Budget

    1095 Words  | 3 Pages

    In early May, the 2016-17 federal budget was released, outlining the government’s proposed plans for revenue and expenditure as well as the fiscal policies that will be initiated in the following financial year. Currently, Australia is experiencing a deficit of $39.9 billion, however the government plans to reduce the deficit to $37.1 billion by 2017 by implementing the plans listed in the federal budget, which will cause the economy to become more efficient and grow faster in the long term. The budget also outlines the government's concern on certain issues and the areas of the economy that needs improvement. Disagreements over the federal budget have raised arguments for and against the governments proposed plans. The main areas that have

    Read More

  • Essay On Government Spending

    1956 Words  | 4 Pages

    Government has filled a spot in the American Society that once belonged to the churches. People regularly attended church throughout American history and use the church as a place of instruction, guidance, support, and charity. The government now fills a larger role in American’s lives and at the same time church attendance is diminishing. The government is growing at a rapid pace and the expanded social programs have more influence on Americans than the church. America is a nation of immigrants which most fled from large governments (sometime oppressive) and now the American government is poised to grow larger than ever. The ideas behind the growth of government can have noble intentions, but more often than not results in wasted money and harm to the peoples it intends to help, and is replacing the roles churches once filled as a guiding and supportive structure in peoples lives.

    Read More

  • Budget Analysis

    1842 Words  | 4 Pages

    A company's budget serves as a guideline in planning and committing costs in order to meet tactical and strategic goals. Tactical goals such as providing budgetary costs for daily operations, and strategic objectives that include R&D, production, marketing, and distribution are all part of the budgeting process. Serving as a guideline rather than being set in stone, the budget is a snapshot of manager's "best thinking at the time it is prepared." (Marshall, 2003, p.496) The budget is a method in which to reign-in discretionary spending, and will likely show variances between what costs have been anticipated and what costs are actually incurred.

    Read More

  • Balanced National Budget Essay

    1152 Words  | 3 Pages

    The sole purpose of needing a balanced national budget is to establish a budget for the country so that all government funding is equally distributed. Because the government gets money from taxes and fees, and spends it on things like national defense, infrastructure, grants for research, education, and the arts, and social programs such as social security and Medicare.

    Read More

  • The Pros and Cons of Participative Budgeting

    1276 Words  | 3 Pages

    Participative Budgeting is the situation in which budgets are designed and set after input from subordinate managers, instead of merely being imposed. The idea behind this sort of budgeting is to assign responsibility to subordinate managers and place a form of personal ownership on the final budget. Nearly two decades of management accounting research has resulted in equivocal findings on the consequences and effects of participative budgeting (Lindquist 1995). Participative budgeting certainly has various advantages, these include the transferral of information from subordinate to superior increased job satisfaction for the subordinate, budgetary responsibility and goal congruence. Its disadvantages include budgetary slack and negative motivation, however it is the conditions in which participative budgeting takes place determines whether the budgeting process is successful. The conditions are dependent on various factors such as the level of participation, level of subordinate influence, the extent to which budgetary slack takes place, volatility, job related information, and the complexity of the budget.

    Read More

  • The Importance of Capital Budgeting

    1818 Words  | 4 Pages

    Capital budgeting is one of the primary activities of a company. Most of the company uses capital budgeting for decision making process of selecting and evaluating long-term investment. The company have to make a right decision with respect to investment in fixed asset such as purchasing of new equipment and delivery vehicles, constructing additions to buildings and many more. The decision must be right because of the project involve huge amount of cash outflow and it is committed for many years.

    Read More

  • Fiscal Policy Essay

    568 Words  | 2 Pages

    Everyone has their own political leaning and that leaning comes from one’s opinion about the Government. Peoples’ opinions are formed by what the parties say they will and will not do, the amounts they want spend and what they want to save. In macroeconomic terms, what the government spends is known as fiscal policy. Fiscal policy is the use of taxation and government spending for the purposes of stimulating or slowing down growth in an economy. Fiscal policy can be used for expansionary reasons, which is aimed at growing the economy and increasing employment, or contractionary which is intended to slow the growth of an economy. Expansionary fiscal policy features increased government spending and decreases in the tax rates as where contractionary policy focuses on lowering government spending and increasing tax rates. It must be understood that fiscal policy is meant to help the economy, although some negative results may arise.

    Read More

  • Cost Accounting Case Study

    2272 Words  | 5 Pages

    As such, there is material cost regulator, manufacturing control, labor cost regulator, excellence control and so on. Conversely, control over the price is implemented through the methods of financial control and typical costing (Meigs, 1998). The control methods aid the management in understanding the operating competence of a firm. Cost accounting also determines the selling price. The intention of all business firms is minimizing costs and maximizing profits. The costs incurred in producing goods and services may be reduced through incorporating alternate but cheaper resources of

    Read More

  • Creating a Personal Budget

    673 Words  | 2 Pages

    As time goes on, you will find that your original budget has some slaws. Some areas of budget planning might be overestimated, and some areas might be underestimated. Some of the flaws in budget making, for instance, are unemployment because if a person gets unemployed he has to have a strict budget to follow. For example making home food and not going out because that will result him in debt. Some of the other flaws are increase in rent, increase in car insurance because of accidents occurring, credit card payments, groceries, and eating out with friends. All of these flaws can cause a person to be more in debt and cau...

    Read More

  • The Importance Of Economics On Personal Life

    1804 Words  | 4 Pages

    It requires an adequate and sound organizational structure, that is, there must be a definite assignment of responsibility for each function of the enterprise. Budgeting compels all the members of management, from the top to bottom to participate in the establishment of goals and plans. Budgeting compels departmental managers to make plans in harmony with the other departments and of the entire enterprise. Budgeting helps the management to put down in figures what is necessary for a satisfactory performance. Budgeting helps the management to plan for the most economical use of labor, material and capital. Budgeting tends to remove the cloud of uncertainty that exists in many organizations, especially among lower levels of management, relative to basic policies and objectives. Budgeting promotes an understanding among members of management of their co-workers' problems. Budgeting force management to give adequate attention to the effects of general business conditions. Budgeting aids in obtaining bank credit as banks commonly require a projection of future operations and cash flows to support

    Read More

  • The Roles of the National Budget

    624 Words  | 2 Pages

    The national budget is the main instrument through which governments collect resources from the economy, in a sufficient and appropriate manner; and allocate and use those resources responsively, efficiently and effectively (Todorovic & Djordjevic, 2009). The work of public budget has increased extremely more complicated, abstruse and worrying (Hou, 2006, p.730).

    Read More

More about Essay On Budgetary Control

Open Document