BUDGETORY CONTROL

BUDGET :- Budget is a financial and/or quantitative statement, prepared prior to a defined period of time; of the policy to be pursued during that period for the purpose of attaining a given objective. (CIMA) It is a plan quantified in monetary terms, prepared and approved prior to a defined period of time, usually showing planned income to be generated and/or expenditure to be incurred during that period and the capital to be employed to attain a given objective. It is a plan of future activities for an organisation. It is expressed mainly in financial terms, but also usually incorporates many non-financial quantitative measures as well.Budgeting is the whole process of designing, implementing and operating budgets. The main emphasis in this is short-term budgeting process involving the provision of resources to support plans which are being implemented.BUDGETORY CONTROL :- Budgetary control is the establishment of budgets relating the responsibilities of executives to the requirements of a policy, and the continuous comparison of actual with budgeted results, either to secure by individual action the objective of that policy or to provide a basis for it’s revision.

ROLE OF A BUDGET CONTROLLER

• Proper budget administration is facilitated by the budget controller who is made responsible for the preparation of the budget and co-ordinating activities of the individual departments. His function and responsibilities will include the following.

-- Generation & dissemination of information needed for decision making and planning to each person in the organisation having such responsibilities. The information may include, but not limited to, forecasts of economic and social conditions, governmental influences, organisation goals and standards for decision making, economic and financial guidelines, performance data, performance standards and the pre-requisite plans of others in the enterprise.

-- Establishing and maintaining a planning system which:• Channels the information to each of the persons responsible for

planning.• Schedules the formulation of plans. • Structures the plans of sub-sections of the enterprise into composites at which point tests are made for significant deviations from economic and

financial guidelines and for goal achievement repeats the process

for larger segments including the enterprise as a whole.Disseminates advice of approval, disapproval or revision of plans to affected individuals in accordance with established lines of authority and organisational

responsibilities.

• Ensuring the accumulation of performance data related to each of the responsibility centres within the organisation, which is to be measured against the plans.

The budget controller is responsible for the final preparation, presentation and interpretation of the financial plan of the company. He is responsible for development of budget procedures. He will act as the key individual co-ordinating all budget functions.