Pre-requisites for effective budgetary control system, Financial Management

ORGANISATION FOR BUDGETARY CONTROL (or) PRE-REQUISITES FOR THE INTRODUCTION OF AN EFFECTIVE BUDGETARY CONTROL SYSTEM

1.   BUDGET CENTRE:  It is a section of the organization of an undertaking defined for the reason of budgetary control.

2. ORGANISATION CHART: A correctly drawn organizational chart shows the functional responsibilities of every member of management and make sure that she/he knows her / his position in the organization and his relationship with others.

3. BUDGET COMMITTEE: It includes all executives in charge of important functions and entrusted with the preparation and finalization of budgets for several centers and also for the whole company called Master budget. usually, the CEO of the company is the Chairman of the committee and executives in charge of main functions of the business are the members.

4.   BUDGET MANUAL:  It is a rulebook or document, which provides for instructions in framing the budgets. It is described as - 'a document which sets out the responsibilities of the persons busy in the routine of and the forms and records required for budgetary control'.

5.   BUDGET PERIOD: It is the period of a budget, which usually is one year.  It is the time period for which the budget is used and prepared.

6.   PRINCIPAL BUDGET FACTOR / KEY FACTOR /LIMITING FACTOR / GOVERNING FACTOR:  It refers to the factor which dominates the business operations and which acts as a barrier or impediment in accomplishing the wanted result specified in the company's budget.  It will limit the activities of an undertaking.  It generally refers to any factor, which is in short supply like demand, stock, etc.  To make sure that the functional budgets are reasonably fulfilled, the degree of the influence of this factor must be first assessed.

Posted Date: 10/15/2012 8:33:31 AM | Location : United States







Related Discussions:- Pre-requisites for effective budgetary control system, Assignment Help, Ask Question on Pre-requisites for effective budgetary control system, Get Answer, Expert's Help, Pre-requisites for effective budgetary control system Discussions

Write discussion on Pre-requisites for effective budgetary control system
Your posts are moderated
Related Questions
A procedure that invented in the 1980s for evaluating the processes of a business to find strengths and weaknesses. Specially, activity-based management finds out areas where a bus

Alpha and Beta Companies can borrow at the subsequent rates.                                                            Alpha               Beta Moody's credit rating

Start-Up Financing Capital provided to companies which have been in operation for less than one year to facilitate all phases of bringing their product to market.

Analytical way of viewing financial problems of a firm The new approach is an analytical way of viewing financial problems of a firm. The main contents of this tactic are what

Fundamentals of Structured Product Engineering 1. (a) Let r m denote the m month swap rate (or Libor rate). Subsequently the 3 × n month forward rate f (3 ×n )

Why might it be very simple for an investor desiring to diversify his portfolio internationally to buy depository receipts as compared to the actual shares of the company? Answ

Your construction company is evaluating the proposed acquisition of a new earthmover. A consulting company you hired developed the following analysis last year at a cost to you of

M has recently joined the board of X Company, a main listed confectionary manufacturer. The company was established as a family business over a century ago and members of the found


Directional Strategies : Strategies in this category involve buying or/and selling securities or financial instruments that the markets believe to be significantly overpriced or un