Budgetary Question:
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Explain the advantages of Budgetary Control?


Advantages of Budgetary Control:

- It is a powerful tool for the purpose of cost control and profit maximization.

- It enables the management to maximise the use of available resources in a most profitable manner.

- As a budgetary control is based on a budget which sets the plan of action in respect of various functional areas of operations. Thus, it acts as a means of declaration of the policies of the management.

- It acts as means of communication.

- It acts as a means of improving co-ordination by developing team spirit in the organisation.

- It enables the management to take proper actions in regard to the adverse variations in the actual and budgeted results.

- It enables the delegation of authority.

- It is a powerful tool with the management for performance appraisal.

- It also provides a basis for the establishment of the incentive systems

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