Advantages of Budgetary Control System
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Points
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Description
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1.
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Efficiency
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The use of budgetary control
system enables the management of a business concern
to conduct its business
activities in the efficient manner.
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2.
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Control on
expenditure
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It is a powerful instrument used
by business houses for the control of their expenditure. It in fact
provide1`s a yardstick for measuring and evaluating the performance of
individuals and their departments.
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3.
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Finding
deviations
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It reveals the deviations to management,
from the budgeted figures after making a comparison with actual figures.
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4.
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Effective
utilisation of resources
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Effective utilisation of various
resources like—men, material, machinery and money—is made possible, as the
production is planned after taking them into account.
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5.
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Revision of plans
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It helps in the review of current trends and framing of
future policies.
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6.
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Implementation
of Standard Costing system
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It creates suitable conditions for the implementation
of standard costing system in a business organisation.
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7.
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Cost
Consciousness
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Budgets are studied by outside
fund providers also
such as banking
and financial institutions, realising that management encourages cost
consciousness and maximum utilisation of available resources.
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8.
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Credit Rating
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Management which
have developed a well ordered
budget plans and which operate accordingly, receive greater favour
from credit agencies.
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