Budget Manual, Budget Period and Key factors of Budgetary Control

1. Name : S.Karunya
Roll NO : 21PK08
Class : II M.Com
Topic : Budget Manual,
Budget Period
and Key Factor of
Budgetary Control

2. Budgetary Control
Budgetary Control means comparing
actual income and expenditure to
planned income or expenditure to
identify whether or not corrective
action is required.

3. Budget Manual
A budget manual is a document
which spells out the duties and also the
responsibilities of the various executives
concerned with the budgets. Budget
manual helps to avoid doubts in any works
or powers and responsibilities etc…

4. Budget Manual Covers:
 It defines the objectives of the
budgetary control system.
 The duties and responsibilities of
various person.
 The financial powers of different
managers for enabling the spending of
amount on various expenses.

5. Continue…
 The length of various budget periods
and control points to be clearly given.
 The procedures to be followed in the
entire system should be clearly
defined.
 Budget centres involved should be
clearly stated.

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 A method of accounting to be used for
various expenditures should also be
stated in the manual. For example :
Written down value method or Straight
line method for depreciation.

7. Budget Period:
 Budgets usually relate to annual
reporting years or natural business
cycles.
 Annual budgets are frequently
divided into monthly and quarterly
components.

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 Some costs are merely proportional
amount. Example: Rent
 Some costs are not merely proportional
amount. Example: Fuel.
 Major capital expenditure budgets may
transcend many years.

9. Key factor:
The key factor is also called as
limiting factor. The key factor means
the factor which limits the size of
output.

10. I) Sales:
• Low market demand.
• Shortage of experienced salesman.
II) Materials:
• General shortage and seasonal
shortage.
• Restrictions imposed by licenses, quota
etc.

11. III) Plant:
• Limted Capacity to generate output.
• Chance of repairs in plant.
Iv) Management:
• Shortage of experienced
executives.
• Little knowledge of know how not
having the vast knowledge.

12. Thank You