Budgetary control is a methodical control of an organization’s operations throw establishment of standards and targets regarding income and expenditure, and a continuous monitoring and adjustment of performance against them. It refers to how well managers utilize budgets to monitor and control costs and operations in a given accounting period.
Objectives of Budgetary Control –
(a) Planning: To achieve its goal, an enterprise must plan what it must do and how it will reach the goal. In the processes of assessing the factors that will help to reach the goals, the enterprise should also anticipate problems that would make the process of reaching its goals difficult. Having identified some of these problems, it can decide well in advance how it would overcome them, if and when they came up.
(b) Coordination: This involves propel balancing of all factors and coordinating the efforts put together by various departments and persons to reach the goals of the enterprise. If they do not work in a synchronized manner, the organization will never be able to reach its goals.
(c) Control: It is a process of keeping watch over actions and taking immediate planned action at the first signs of deviation from the planned course of action. In this way, events are compelled or directed to confirm the plans.