Know About Budgeting Control

Budget is systematic plan for proper utilization of material and man power. A budget shows an estimated revenues and costs in business organization.

Characteristics of budget:

• Budget is taken from long term strategy of the organization and it is prepared in advance.
• It is represented in quantitative form and monitory units and it relates to future period and for this future period, goals or objectives are decided.

Various types of budgets are created for various purposes, for example administrative expense budget, sales budget, raw material budget, production budget etc. Master budget integrates all these budgets. Master budget represents overall plan of the organization and business.

Budgetary control:
Without an efficient and effective system of control there is no success in the system of planning. If exercise of control is done in the organization with help of the budget, it is called as budgetary control. The budgetary control process includes:

• Preparation of different budgets.
• Making continuous comparison of real performance with budgetary performance.
• Making revision of budget to make changes which are necessary.

Budgetary control is an essential tool for making organization more effective and efficient on all fronts. And it is important device for controlling expenditure and achieving the overall goals.