Essay On Budgetary Control

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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

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