Question

What is Advantages and disadvantages of the budgeting control system?

Answer 1

ADVANTAGEES OPF BUDGETARY CCONTROL

1) It identifies policies, goals and plans off a enterprise.

2) Budgetary control secures better coordination between different departments.

3) It fixes a target. Thus various departments will try hard to achieve the target. Therefore budgetary control is considered as an efficient method for controlling the activities of different departments.

4) It helps in decreasing cost of production.

5) It facilitated centralized control.

6) It aids the management in determine the situations where the action is required to solve issues without any delay.

7) It helps in smooth functioning of business.

DISADVANTAGES OIF BUDGETARY CONTROL

1) It involves heavy expenditure. Thus small enterprises cannot afford it.

2) Under inflationary conditions it is very difficult to prepares budget.

3) Budget is anticipated and it is uncertain.

4) Budgetary control is considered as a management tool. Trough it is not a substitute for management it cannot replace management.

5) Lack of managerial support will lead to unsuccessful budgetary control.

6) It is a time consuming process and requires more time to implement in a firm.