What are 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.