Question

WOM plc uses budgetary control as part of their Management Information System. As the Finance Director at WOM plc, you are required to give a verbal presentation to graduate trainees entitled ‘The importance of budgetary control’. Prepare the speech you would give as part of the presentation in which you demonstrate an understanding of the underpinning concepts and ideas of budgetary control within large companies. You must use examples to support your explanation

Answer 1

Budgetary control is very important in order to control the overall income in the expenditure level of the organisation and it will be helpful in controlling of the project for large extent because preparation of budget and controlling of the budget is completely different thing because the budget will be implemented there will be large variation on the operational front from the actual figure in the standard figure that is a need to control the variation arising out budget

An organisation should be properly and adequately equipped to manage with the corrective action in order to when is the deviation because there will be various deviations as nothing can be accurately predicted in the budget and management should be highly flexible in order to synchronise it with actual budget so that they can incorporate most of the changes and maximize the rate of return.

a high degree of budgetary control process will be helping the organisation to achieve its goal in efficient and effective way because it will be focusing at optimum utilisation of resources and it will be trying to incorporate the best management practices in the organisation which will be focused at minimising the deviation between actual and standard and it will be helping in maximizing the rate of return of the company

there is a need for budgetary control because for that can never be predicted accurately in advance as per the highly fluctuating macro situations and one should be trying to incorporate all the changes and adopt it quickly so that there will be a need for achievement of goales through proper implementation of budgetary procedures.