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

Budgetary control is a technique of controlling that involves preparing plans in the form of budgets. Budget refers to a financial or a quantitative statement that defines the targets to be achieved and the policies to be followed in a specific period of time. The actual performance is then compared with the budgetary standards. This comparison helps in identifying the deviations and thereby, guides in taking appropriate corrective measures. Budget can be prepared for different divisions of the organisation such as sales budget, production budget, purchase budget, etc. However, for the budgeting to be effective, future estimates must be made carefully. Budgeting also acts as a source of motivation for the employees by setting the standards against which their performance will be assessed. Thus, it encourages them to achieve the set objectives. In addition, it is also used to facilitate coordination among different divisions/departments of the organisation. Moreover, proper budgeting ensures that resources are allocated to different divisions as per their requirements. Thereby, it helps in optimum utilisation of the resources.

Budgetary control is a technique of managerial control in which all operations are planned and this will help us in knowing how much we have to spend in order to achieve the future result. It compared the actual result with budgetary standards. This comparison reveals the necessary actions to be taken so that the organisational objectives are accomplished. Budgeting offers the following advantages 

(i) Budgeting focuses on specific and time bound targets. 

(ii) Budgeting is a source of motivation to the employees they set the standards against which their performance will be appraised and thus, enables them to perform better. 

(iii) Budgeting helps in optimum utilisation of resources by allocating them according to the requirements of different departments. 

(iv) It helps the management in setting standards.

Budgetary control is a technique of managerial control in which all operations are planned and this will help us in knowing how much we have to spend in order to achieve the desired result. It compares the actual result with budgetary’ standards. This comparison reveals the necessary actions to be taken so that the organizational objectives are accomplished. 

Budgeting offers the following advantages.

1. Budgeting focuses on specific and time-bound targets. 

2. Budgeting standards is a source of motivation to the employees. They set the standards against which their performances will be appraised and thus, enables them to perform better. 

3. Budgeting helps in optimum utilization of resources by allocating them according to the requirements of different departments. 

4. It helps the management in setting standards.