Purposes of Budgetary Control

Learn of the purposes of budgetary control necessary to ensure a sound budgetary process and for successful operation of any business.

It is necessary to understand the purposes of such control system. This is so if the company’s budget is going to be operated successfully and to maximum advantage.



Budgetary control purposes are as follows:

  1. To establish a plan or budget covering all the activities of a firm or organization of a given period. This period can be of any length but the most usual period is that of one year.
  2. To fix in monetary terms the objectives which the business sets out to achieve in that period, and to ensure that adequate working capital, including liquid resources, is available for achieving such objectives.
  3. To provide, through the medium of comparison between actual and budgeted results, a basis for evaluating the efficiency of the firm’s operations, both in total and for each function or department.

You can learn more by reading our sample budget proposal.

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