Q. 3

Write a short note on budgetary control as a technique of managerial control.

Answer :

Budgetary control is a method of controlling that involves the preparation of plants in the form of a budget. Budget is the financial statement that defines the targets to be achieved and the policies to be followed during a specific duration of time. The actual performance is compared with a budgetary standard. If there is any deviation, measures are taken for the same. Budgetary control acts as a technique of controlling in the following manner:

● Budget is made for different divisions of the organizations at such as sales budget, purchase budget and production budget.

● It is a source of motivation for the employees to measure the performance against the budgetary standard.

● It also helps to bring about coordination in the organisation.

● It also helps to ensure that the resources are allocated to different divisions as per the requirement. It helps to use the resources in the most optimum way.

● It focuses on time and specific bound targets.

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