Budgetiry control

 There are many techniques of budgetary control. These techniques are budgetary control, inventory control, and so on. Every technique is important and plays an important role in cost. control. Among all budgetary control is an important technique of cost control. The process of preparing a budget for the coming financial year and comparing it for actual performance and resource deviation to make the organization more effective, efficient. This process is called budgetary control.

Many experts define budgetary control in several ways. Some ways are as below:

According to Keller and Ferrara Stare, a " budget is an action plan to achieve stated objectives based on predetermined series of related assumptions".

According to G.A. Welsh, "A budget is a written plan covering projected activities of a firm for a definite period".

According to CIMA UK, " A plan quantities in monetary terms prepared and approach before a defined period. Usually showing planned income to be generated and expenditure to be incurred during the period and the capital to be employed to attain a given objective.

Nature of budgetary control:

There are many natures of budgetary control. These natures are as below:

1. It is a financial document.

2. It is an internal document of an organization.

3. It belongs for one year.

4. It is a technique that compares predefined performance to actual performance.

5. It is a goal-oriented approach.

6. It is a positive approach.

Objective of budgetory control:

1. Concern communication- It is an important function of organization. Budgetory control communicates concern person, organisation expect what they should do for the development of organisation. if human resource force knows earlier they provide their best for the development of organisation.

2. Cost control- every organisation wants to control of their expenditure with the help of budgetory control. Organization implements, exceeds many policy, programmes, rules, regulation, law that helps to control cost and other concern things.

3. Proper planning- every organisation makes policy, programmes, rules, regulation, law and so on. Besides above with the help of budget they also make financial policy, rules, regulation, law and so on. Budgetory control helps us to make, implement, execute financial rules, regulation, policy, procedure for the growth of organisation.

4. To measure performance- every organisation measure the performance of organisation at weekly, monthly, quarterly, anually basis. There are many techniques that is used to measure the performance of organisation. Budgetory control is an important technique that is used to measure the performance of organisation at weekly, monthly, quarterly basis..

5. Cordination- There are various departments present in organisation. These departments are production, marketing, human resource, finance and so on. The role of each department is very important for the success, growth and development of organisation. Budgetory control coordinates all departments by a systematic, scientific way and forward them to achieve their goal.

Advantage of budgetory control:

There are many advantages of budgetory control. These advantages are as below:

1. Coordinate all functions- There are many functions of organisation. These functions are production, selling, demand forecasting, supplying, warehousing and so on. With the help of budgetory control  we coordinate of organisation by effective, efficient way.

2. Optimum utilization of resource- There are different types of resource organisation possess. These resource are man, money, machine, material and so on. With the help of budgetory control organisation makes policy, programmes, rules, regulation, law to optimum utilization of resources.

3. Motivation- It is also an important objective of budgetory control. There are many method of motivate employees. These methods are maslow theory, Herbert theory, theory x and y and so on. Besides above budgetory control is also an important techniques because It fix the responsibility of human resource force towards their goal, function and so on. So it is also an important advantage of budgetary control.

4. Performance evaluation- Every organisation wants to improve the performance of organisation. Budgetory control checks the performance of organisation at monthly basis, quarterly basis, half yearly basis, anually basis. So it removes all drawbacks, barrier that is present on the path of organisation and improve the performance of organisation.

5. To minimise cost- Every organisation wants to minimise their cost. Before minimising the cost, organisation compares their expenditure to budget and find out variance and removes the variance and minimise their cost.

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