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Budgetary Control

This document discusses budgetary control, including what a budget is, classifications of budgets, types of budgets, advantages and limitations of budgetary control. It defines budgetary control as a system that uses budgets to plan and control all aspects of production and sales. Budgetary control involves preparing budgets in advance, comparing actual results to planned objectives, and using budgets to manage departments. The main types of budgets are fixed and flexible budgets, and budgets can be classified according to functionality such as sales, production, cash etc. Advantages include helping management, reducing seasonal variations, and maintaining adequate working capital. Limitations include lack of flexibility, costs, and difficulty maintaining accuracy.

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186 views16 pages

Budgetary Control

This document discusses budgetary control, including what a budget is, classifications of budgets, types of budgets, advantages and limitations of budgetary control. It defines budgetary control as a system that uses budgets to plan and control all aspects of production and sales. Budgetary control involves preparing budgets in advance, comparing actual results to planned objectives, and using budgets to manage departments. The main types of budgets are fixed and flexible budgets, and budgets can be classified according to functionality such as sales, production, cash etc. Advantages include helping management, reducing seasonal variations, and maintaining adequate working capital. Limitations include lack of flexibility, costs, and difficulty maintaining accuracy.

Uploaded by

er_rimjhimsingh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Budgetary Control

By Free Powerpoint Templates AMIT KUMAR

Page 1

OUTLINES
INTRODUCTION

CLASSIFICATION OF BUDGET
BUDGETARY CONTROL ADVANTAGES LIMITATIONS Free Powerpoint Templates

Page 2

WHAT IS A BUDGET?
A plan expressed in monEy.
It is prepared and approved prior to the budget period and may show income, expenditure and the capital to be employed. May be drawn up showing incremental effects on former budgeted or actual figures, or be compiled by Zero-based budgeting.
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CLASSIFICATION OF BUDGET

ACCORDING TO

FLEXIBILITY

ACCORDING TO

FUNCTIONALITY

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TYPES OF BUDGETS ACCORDING TO FLEXIBILITY

FIXED BUDGET

FLEXIBLE BUDGET

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FIXED BUDGET
IN FIXED BUDGET TARGETS ARE RIGIDLY FIXED . THESE ARE USUALLY PREPARED FROM ONE TO THREE MONTHS IN ADVANCE OF THE YEAR TO WHICH THEY ARE APPLICABLE

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FLEXIBLE BUDGET
FLEXIBLE BUDGET IS DESIGNED TO CHANGE IN ACCORDANCE WITH THE LEVEL OF ACTIVITY ACTUALLY ATTAINED.

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TYPES OF BUDGET ACCORDING TO FUNCTIONALITY SALES BUDGET PRODUCTION BUDGET CASH BUDGET PURCHASE BUDGET R & D BUDGET ...

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Budgetary Control
DEFINATION
BUDGETARy ConTRoL IS A SySTEm WHICH USES BUDGETS AS A MEANS OF PLANNING AND CONTROLLING ALL THE ASPECTS OF PRODUCING AnD/oR SELLInG THE CommoDITIES oR SEVICES ------BY K J BETTY Budgetary control is the one of best technique of controlling, management and finance in which every department's budget is made with estimated data.
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ConT.
BUDGETARy ConTRoL IS THE pLAnnInG IN ADVANCE OF THE VARIOUS FUNCTIONS OF BUSINESS SO THAT THE BUSINESS AS AWHOLE CAN BE ConTRoLLED. The use of budgets to control operations. Compare actual results with planned objectives.

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Budgetary Control DIGRAMATIC REPRESANTATION

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ADVANTAGES OF BUDGETARY CONTROL


TOOL OF MANAGEMENT PROVIDES CONSIDERABLE BASE ON WHICH THEY CAN BUILD UP THEIR POLICIES HELPS IN REDUCING SEASONAL VARIATIONS PROVIDES A YARDSTICK FOR MEASURING PERFORMANCE HELPS IN MAKING FULL ECONOMIC USE OF CAPITAL EMPLOYED

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ConT.
HELPS IN FORECASTING AND SETTING STANDARD COSTING SYSTEM. HELPS IN MAINTAING ADEQUATE WORKING CAPITAL AVAILABLE FOR EFFECTIVE OPERATIONS

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LIMITATIONS
TRADITIONAL BUDGETS HAVE LACK OF FLEXIBILITY AND THEY ARE RIGID IN NATURE THESE ARE COSTLY IN NATURE SO SMALL ORGANISATIONS CAN NOT AFFORD IT. DUE TO LACK OF INTEREST OF EmpLoyEES , IT CAnT BE IMPLEMENTED PROPERLY
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ConT.
BUDGET ALWAYS REQUIRE REVISION FROM TIME TO TIME SO THAT IT BECOMES A TYPE OF ROLLING ACTIVITY AND HANCE IT BECOMES MONOTONOUS IN NATURE BUDGET PLAN IS TOTALLY BASED ON ESTIMATIONS HENCE MANY A TIMES ACCURACy CAnT BE mAInTAInED
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THANKS

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