BUDGETING CONTROL

 Meaning And  Definition Of Budgetary Control

The process of investigating what is being done and comparing the results with the corresponding budget data to verify accomplishments or remedy differences also called budgetary controlling.

According to Brown and Howard, 'A budget is a pre- determined statement of management policy which provides a standard for comparison with actual results during a given period

According to -J. Batty "Budgetary control is a system which uses budget as a mean of planning and controlling all aspects of producing and selling commodities or services"

Feature Of Budgeting Control

- Determination of Goals

- Characteristics of Budgetary Control

- Attainment of Goals

- Laying out of plan

- Making Comparison

- Correction or Revision

YOU CAN ALSO READ :- ZERO BASED BUDGETING 

Essentials of Budgetary Control

- Organization for budgetary control.

- Budget centers

- Budget officers/committee

- Budget manual

- Budget period

METHODS OF BUDGETING 

1. Incremental Budgeting :-In this, current year's budget is prepared by making changes in the past year's budget considering the inflation factor. It's a quick and easy method of preparing budgets.

2.Activity Based Budgeting :- Activity based budgeting is a budgeting method where budget is prepared after considering the cost drivers. It does an in depth analysis of activities incurring cost.

3. Zero Based Budgeting:- In ZBB, current year's budget is prepared from the scratch, without considering the budget of the previous year.

4. Traditional Budgeting :- It considers last year's budget as the base. The changes are done based on the inflation rate, consumer demand, market situation etc.

Objectives of Budgetary Control

The main objectives of budgetary control are the follows:

- Elimination of wastes and increase in profitability.

- To anticipate capital expenditure for future.

- To centralise the control system.

-  Correction of deviations from the established standards.

- Fixation of responsibility of various individuals in the organization

PROCESS OF BUDGETING CONTROL 

1. Preparing the Budget

2. Communicating the Budget

3. Measuring Results

4. Comparing results and analysing deviations

5. Reporting the results and taking corrective actions

6. Revising of the Budget

TYPES OF BUDGET 

Advantages of Budgeting Control 

-  Base for installation of standard costing

- Continuous evaluation of performance

-  Forces management to plan ahead

- Co-ordination

- Measures Performance

- Control Cost

- Proper Communication

- Maximization of Profit

Disadvantages of Budgeting Control 

- Fear of Wrong Estimates

- Costly

- Revision Required

- Problem of Coordination

- Provides Specific Aims

-  Tool for Measuring Performance

- Problem of Co-ordination

- Economy

 - Conflict among different departments