Actual performance is compared with standards and deviations are reported to top management for action against unfavourable deviations. Emphasis on co-ordination and cooperation helps in achieving the predetermined targets and goals. Effective implementation of budgets depends on cooperation of concerned personnel of various departments. Budgets of the various functions are interlinked and dependent.
Performance and working of various activities is effectively coordinated through budgetary control. This is achieved through planning, coordination and control of various activities in a programmed manner. It also makes the various operations of the enterprises economical.įollowing are some of the advantages of budgetary control:īudgetary control aims at increasing the over-all profits of the organisation. If there is change in conditions budgets also should be adjusted to accommodate the changes.īudgetary control is helpful in setting targets for the whole concern and achievement of the targets. Participation of All Departments Concerned:īudgets are to be set for all the departments so that their participation in implementation will be effective.īudgets are prepared on the basis of certain conditions. The targets set should be realistic so that they are achievable and budgets should not frustrate the workers by fixing unrealistic targets.ħ. Staff are to be appraised of the budgets and benefits they are going to derive directly and indirectly. The accounting system should provide the required information in time.Įfficient system has to be devised to reduce the differences between the budgets and actual performance.
The authority and responsibilities are to be properly defined to pin-point the responsibility of specific individuals in key positions.
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