Use of Budgetary controls

Budgetary controls are used for the following reasons:

1) To state the objectives of the organization as a whole.

2) To reveal the extent by which actual results have exceeded or fallen short of the budget.

3) Budgetary control helps in indicating why actual results differ from the budgeted results.

4) It is important as a basis for the revision of the current budget or the preparation of future budgets.

5) To ensure that resources are used as efficiently as possible.

6) To see how well the activities of the organization have been co-ordinated

7) To provide some central control especially where activities are decentralized.