Objectives of Budgetary Control
For every enterprise, budgetary control involves determining the actual results and comparing them with budgeted figures and standards for the future period. The variance between budgeted figures and actual performance is then calculated. Prior to recording actual results, budgets are prepared.There is a great deal of competition, uncertainty, and risk in the modern business world.
As a result of the complexity of these management problems, a variety of managerial tools, techniques, and procedures have been developed that are useful for business management. Among all the planning and controlling devices, budgeting is the most common, useful, and widely used.In order to control costs and maximize profits, budgetary control has become an essential tool of management. When the various factors of production are combined in a profitable manner, costs can be reduced, waste can be reduced, and income can be maximized.
What are the objectives of Budgetary Control
Some of the objectives of Budgetary Control are as follows:
- To utilizate different levels of management to achieve the firm’s goals in a cooperative effort.
- To provide centralized control with delegated responsibilities and authority.
- To maximize profit by maximizing the use of available resources while planning income and expenditure.
- To make sure that sufficient working capital in other resources is available for efficient operation of the business.
- To reduce losses and wastes as much as possible.
- To identify clearly where efforts need to be made.
- To ensure that the firm does not get thrown off course from its long-term objectives by emergencies.
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