Learn the meaning of budgetary control, a system necessary to monitor actual performance against budget so as to ensure business success.
The Budgetary Control Meaning
This is the establishment of budgets relating to the responsibilities of executives to the requirements of a policy. It ensures the continuous comparison of actual with budgeted results. This is either to secure by individual action the objectives of that policy or to provide a basis for its revision.
It is a system which, despite the fact that it uses financial terms as its mode of expression, is intimately concerned with all the activities of a business. This is to say, it has to do with the technical, production, and commercial functions, as well as with the financial. It also has to do with taking corrective action where necessary. It is therefore necessary to ensure that the firm employing such a system is organized. Such organization must ensure that it can be operated successfully and to the maximum advantage. This is really an application of the techniques of scientific management in the financial sphere. Therefore it requires the application of similar techniques in other spheres as well.
The important thing is to ensure that the various functions in a company are clearly defined. Additionally, the responsibility of each executive has to be clearly laid down so that no overlapping of responsibility occurs.
Learn More: Read our sample budget proposal to learn more, or contact us if you still need additional information.