Budgeting Interview Question:

What are the advantages of Budgetary Control?

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Advantages of Budgetary Control:
★ It is a powerful tool for the purpose of cost control and profit maximization.
★ It enables the management to maximize the use of available resources in a most profitable manner.
★ As a budgetary control is based on a budget which sets the plan of action in respect of various functional areas of operations. Thus, it acts as a means of declaration of the policies of the management.
★ It acts as means of communication.
★ It acts as a means of improving co-ordination by developing team spirit in the organisation.
★ It enables the management to take proper actions in regard to the adverse variations in the actual and budgeted results.
★ It enables the delegation of authority.
★ It is a powerful tool with the management for performance appraisal.
★ It also provides a basis for the establishment of the incentive systems
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