What is meant by 'Budgetary Control' as a technique of controlling? State any three advantages of it.
Budgetary control is defined as a technique of managerial control in which budgets relating to the responsibilities of executives are established and continuous comparison of actual with standards is made. This comparison reveals the necessary actions to be taken so that organisational objectives are accomplished.
Advantages of budgetary control includes:
1) Budgeting focuses on specific and time-bound targets and thus, helps in attainment of organisational objectives.
2) Budgeting is a source of motivation to the employees who know the standards against which their performance will be appraised and thus, enables them to perform better.
3) Budgeting helps in optimum utilisation of resources by allocating them according to the requirements of different departments.
