Budget and Budgetary Control

A budget can be called an Budget and budgetary control organization's plan expressed in monetary terms. A budget can be prepared for an entire organization or its parts in terms of geographical territories, functional divisions, products, or significant activities like a strategic project. A budget can include capital to be employed, incomes, and expenditures. A budget is usually prepared for a definite period like a financial year or a quarter. It has to be prepared and approved in advance of the period start.

While working with budgets, the actual may vary when compared to the budgeted amounts. In such cases either actuals are corrected or the budget is modified. The aim is to have as minimum deviation as possible. This act is called Budgetary Control that aims at achieving maximum efficiencies while working with management policies. The aim of whole process is to assist the management in planning, coordination, and control. A budget may be seen as a management tool to communicate policies and targets at the operations level.