Budgetary control is a system that uses budgets to plan and evaluate performance according to budgeted goals. It involves planning, controlling, coordinating, recording, and following up on budgets. Successful budgetary control requires clarifying objectives, delegating authority and responsibility, proper communication, budget education, participation, and flexibility. The objectives of budgeting and budgetary control are to pre-determine capital expenditures, plan and control income and expenses, operate divisions efficiently, smooth seasonal variations, and obtain economical use of capital.

2. Meaning Of Budgetary Control
The technique of managerial control by budget is
known as budgetary control. It is applied in a firm
to evaluate the performance in terms of budgeted
goals

3. Definition Of Budgetary Control
“Budgetary control is a system which uses budget as a
mean of planning and controlling all aspects of
producing and selling commodities or services”
- J.Batty

4. Budgetary Control can be defined by the meaning of
Budget:-
“Budget is an estimate of future needs arranged
according to an orderly basis covering some or all of
the activities of an enterprise for a definite period of
time”
-George. R. Tesry

5. Characteristics Of Budgetary Control
Planning
Control
Co-ordination
Recording
Appraisal and Follow up.

6. Requisites For Successful Budgetary Control
System
Clarifying Objectives
Delegation of Authority and Responsibility
Proper Communication System
Budget Education
Participation of all employees
Flexibility

7. Objectives Of Budgeting & Budgetary Control
To pre-determine in capital expenditure of a business
To plan and control the income and expenditure of the
firm.
To operate various divisions units, dept.,and cost
centre efficiently and economically.
To smooth out seasonal variations in production by
developing new product.
To obtain a more economical use of capital.

8. ORGANISATION CHART FOR
BUDGETARY CONTROL

9. MANAGING
DIRECTOR
BUDGET
COMMITTEE
BUDGET
OFFICER
SALES
MANAGER
1. SALES
BUDGET
2.
ADVERTISI
NG
BUDGET
3. SELLING
AND
DISTRIBUT
ION
BUDGET
ACCOUNT
S
MANAGER
1. COST
BUDGET
PRODUCTI0
N
MANAGER
1.
PRODUCTI
ON
BUDGET
2. R& D
BUDGET
3. REPAIR &
MAINTENA
NCE
BUDGET
SECRETARY
OF OFFICE
MANAGER
1. ADM. EXP.
BUDGET
2.CO-ORDINATIO
N
PURCHASE
MANAGER
1.
PURCHASE
BUDGET
2.
INVENTARY
BUDGET
FINANCE
MANAGER
1. CAPITAL
BUDGET
2. CASH
BUDGET
3. WORKING
CAPITAL
BUDGET
4. MASTER
BUDGET
R & D
MANAGER
1.R & D
BUDGET
PERSONAL
MANAGER
1. PERSONAL
BUDGET
2. LABOUR
WELFARE
BUDGET

10. Advantages Of Budgetary Control
Profit Maximization
Clarity of Objectives
Delegation of authority and responsibility
Best Utilization of resources
Team spirit and co-operation
Intelligent consideration of future activities

11. Limitations Of Budgetary Control
Budgets are based on estimates
Budget is a not a substitute of management
Time effect
Budgeting is not an automatic process
Rigidity in control

12. Classification and Types Of Budgets
Classifications on the basis of Time
a. Long term budgets
b. Short term budgets
c. Current budgets
On the basis of Flexibility
a. Fixed budgets
b. Flexible budgets

13. On the basis of Function
a. Operating budgets
b. Financial budgets
c. Master budgets

14. Some Typical Budgets
Zero Based Budgeting
“Zero based budgeting means budgeting all the
activities of the org. from zero disregarding trends”

15. IDENTIFICATION OF DECISION
UNITS
ANALYSIS OF DECISION UNITS
FORMULATION OF DECISION
PACKAGES
ALLOCATION OF ORGANIZATIONAL
RESOURCES
PREPARATION OF DETAILED
BUDGET

16. MEANING OF PERFORMANCE
BUDGETING
Performance budgeting is an important tool of
management to control the activities in various respect and
to help specifically in the formulation of programmes
objectives and their accomplishment.
A budget which is based on the performance is called
performance budgeting. It is a particular technique by
which operations of an enterprise are to be presented in
terms of function, programmes, activities and projects to
be followed in a fixed period.

17. SETTING OF
OBJECTIVES AND
TARGETS
FORMULATION
OF PROGRAMMES
AND ACTIVITIES
EXECUTION OF
THE BUDGET
EVALUATION
AND APPRAISAL