This presentation discusses budgetary control. It defines a budget as a financial statement prepared for a definite future period to attain a given objective. Budgetary control involves establishing budgets, relating executive responsibilities to policy requirements, and comparing actual results to budgets. The presentation discusses installing a budgetary control system, including determining objectives and constraints, organizing budgeting responsibilities, setting the budget period, and reporting results. Budgetary control allows management to effectively utilize resources but relies on estimates that may not be achieved.

1. PRESENTATION ON ACCOUNTS
TOPIC: BUDGETARY CONTROL
PRESENTED BY:
DEIBOK PALA
KHRAW RUMNONG
GARY LYNGDOH &
ARIZONA POHLONG
OF MBA1st SEMESTER

2. BUDGET
The ICMA, London, defines budget as a
financial and/or quantitative statement prepare
to a definite period of time of the policy to be
pursued during that period for the purpose of
attaining a given objective.

3. ESSENTIAL FEATURES
• It is a statement in terms of money or quantity
or both
• It is prepared for a definite future period
• It is prepared in advance
• Its purpose is to attain a given objective

4. BUDGETARY CONTROL
The ICMA, London, defines budgetary control
as ‘ the establishment of budgets, relating the
responsibilities of executive to the
requirements of a policy and the continuous
comparison of actual with budgeted results
either to secure by individual actions the
objective of that policy or to provide a firm
basis for its revision.

5. OBJECTIVES
• To provide a detailed plan of actions
• To coordinate the different units and the
activities of the organization with a view to
utilize resources judiciously.
• To motivate organizational member to
perform well
• To exercise control on cost

6. A Budgetary Control System secures
control over cost and performance.
• Establishing budgets
• Comparing actual results with the budgeted
ones
• Taking corrective action or revising the budget
if necessary

7. FORECAST AND BUDGETARY CONTROL
• Forecast is a statement of probable events
• Budget is an operating and financial plan of a
firm
At planning stage it is essential to prepare a
forecast of probable course of action for the
business in future. Plans or budgets are
prepare base on these forecast.

8. INSTALLING A BUDGETARY CONTROL SYSTEM
Having understood the meaning and significance of
budgetary control in an organization, it will be useful for you
to know how a budgetary control system can be installed in
the organization. This requires, first of all, finding answers to
the following questions in the context of an organization:
• What is likely to happen?
• What are the objectives to be achieved?
• What are the constraints and to what extent their effects can
be minimized?
Having found answers to the above questions, the following
steps may be taken for installing an effective system of
budgetary control in an organization

9. Budgetary control organisation
A. Organisation for budgeting
• Budget center
• Budget manual
B. Responsibility for budgeting
• Budget controller
• Budget committees
C. Fixation of the budget period

10. D. Determinations of the key factors:
• Budget key factor: key factor is define as the
factor the extent of whose influence must first
be assessed in order to ensure that the
functional budgets are reasonably capable of
fulfillment
E. Reporting on results.

11. ADVANTAGE
• Enable management to conduct business in
the most effective manner.
• It ensures effective utilization of men,
materials, machines and money.
• It is helpful in reviewing current trends and
determining policy of the business.
• It helps promoting a feeling of cost
consciousness.

12. LIMITATIONS
• It may be impossible to achieve the budgeted
targets as estimates and forecast.
• It may serve as constraints on managerial
initiative.
• Correlation and coordination of various
budget is expensive.
• Not a substitute of management.

13. CONCLUSION
Hence budgetary control in an important tool
for any organization to establish a budget for
future events. It helps organization in proper
utilization and control of its resources. Budget
are estimates and are based on forecast which
are not certain. Therefore the effectiveness of
budgetary control depend on the availability
and quality of the forecast.