BUDGET

Budget can be prepared at any level ranging from an individual to national level. It is basically the estimation of revenue and expenses.

Images

Budget is Broadly Categorized into the following 3 categories:

  1. Surplus Budget: It usually means that the expected revenue is more than the estimated expenses. Thus, profits are anticipated.
  2. Balanced Budget: It means that the expected revenues almost equal the estimated expenses. No profits as well as no losses are anticipated.
  3. Deficit Budget: It means that the expected revenue is less than the estimated expenses. Hence, losses will be incurred.

PURPOSE OF BUDGET

The purpose of budget includes the following 3 aspects:

  1. It is a forecast of estimated income and expenditure to be incurred over the time period for which budget is planned.
  2. It serves as a tool for decision making as it provides clarity with respect to revenues and expenses.
  3. It is an appropriate mean to measure business performance.

BUDGETARY CONTROLS

BUDGETARY CONTROLS logo

Budgetary Control is basically a technique where the actual results i.e. actual revenues and expenses are compared with the budget planned before the start of the financial year. It highlights the need for adjustment of the performance, if required. It also shows how well the managers have controlled costs and operations in an accounting period.

It analyses the budget after its implementation to know major deviations.

BUDGETARY CONTROL TECHNIQUES

For the purpose of budgetary control, various techniques are used which are briefly explained as follows

1.Variance Analysis

     Variance Analysis logo

In the following analysis, Budget is prepared for each and every department. Further, a comparison is made between the actual and estimated accounting figures. With the help of this technique, variances are found. The variances are further divided into Favourable and Unfavourable Variances.

For instance, the difference between actual production cost and estimated production cost will be denoted by production variance.

This technique helps in reducing cost and is commonly used for budgetary control.

2. Responsibility Accounting

  Responsibility Accounting logo

It is considered to be a good technique for budgetary control. In this, 3 centres namely Cost Centre, Profit Centre and Investment Centre is created. All these centres are like the department of the organisation and employees are classified on the basis of these centres.

The performance of the employees in manually recorded and their accountability is fixed regarding certain goals that might be quantitative or qualitative. This technique helps to take decision regarding promotion or demotion based on employee’s performance.

3. Adjustment of funds

Adjustment of funds

Under this technique, Top management takes decisions regarding adjustment of funds from one project to another.

For instance, if a new project started by an organisation needs money and there is surplus money allocated to an already existing project, then the surplus funds can be adjusted against new project for its initial setup. This technique facilitates proper allocation and adjustment of funds and prevents misuse.

4. Zero Based Budgeting

  Zero Based Budgeting logo

Another technique which is immensely popular these days is zero based budgeting. Under this technique, budget of next year is considered as nil which can be only possible if estimated revenue is equal to estimated expenses. At that time, difference between estimated revenue and estimated expenses will be zero. Any excess amount of money will be adjusted. This technique helps in having control over each and every amount of money spent during the year.

Want to get more information on budgets and budgetary controls?

Click on the link for more information about our highly recommended Income Tax Course!

Email us now at [email protected] or call us at our centralized number: 901526626

Recommend Reads:-

Also Check this Video 

Post Graduate Program And our courses

Ranks Amongst Top #5 Upskilling Courses of all time in 2021 by India Today

View Course
Career Advice

38 Comments

  1. Kaikei Roy Reply

    Different type of Accounting Content highlights the need for adjustment of the performance if required. It also shows how well the managers have controlled costs and operations in an accounting period.. I apricate your effort and understanding.I am getting a very good quality of course content related to my skills.

  2. Budgets and Budgetary Course Budgetary Control is basically a technique where the actual results i.e. actual revenues and expenses are compared with the budget planned before the start of the financial year. It highlights the need for adjustment of the performance,

  3. Budgets and Budgetary Controls Updates It serves as a tool for decision-making as it provides clarity with respect to revenues and expenses. I really like their way of explanation and teaching method also.

  4. This article on “Budgets and Budgetary Controls” highlights the importance of financial management. It explains how budgetary controls aid in managing expenses and ensuring that an organization stays within its budget. A must-read for professionals looking to improve their financial management skills.

  5. Hi I am Rohit , I want to say that , This article from Henry Harvin provides valuable insights on the importance of budgeting and budgetary controls in managing finances and achieving business goals. A must-read for any business professional

  6. Ruhi sharma Reply

    This article provides valuable insights on the importance of budgeting and budgetary controls in managing financial resources effectively. It highlights the role of budgeting in helping organizations achieve their goals and make informed decisions. A must-read for anyone looking to improve their financial management skills.

  7. Budgets and Budgetary Controls Training. It highlights the need for adjustment of the performance if required. It also shows how well the managers have controlled costs and operations in an accounting period.

  8. Budgets and Budgetary Controls details are basically a technique where the actual results This is the ideal platform for professional development. The budget is prepared for each and every department. I really like their way of explanation and teaching method also.

  9. Budgets and Budgetary Controls Course Providing From HENRY HARVIN.Awesome videos to help engage over such a long period of time. The course used great examples to put concepts into perspective. Key points stuck in my memory through emphasis. A good way for a person looking to go into marketing.

  10. Budgets and Budgetary Controls A useful training course for all fields and gives expanded thinking to find problems and solve them in the best correct ways. It can be said about a method that reaches the correct thinking in life.

  11. Budgets and Budgetary Controls I was suggested to get these certificates because in IT, it pays to have multiple areas of knowledge. I found the courses to be helpful and thorough and I recommend that everyone take advantage of them.

  12. Budgets and Budgetary Controls This is my second time taking the exam I have to take it every year. It is a great tool and I for one am very happy about it.The performance of the employees in manually recorded

  13. Budgets and Budgetary Controls Its a very intriguing and full of learning. The concepts of Marketing was very beautifully explained with the help of links , module reading etc. Amazing course.

  14. Budgets and Budgetary Controls This course I just took for pleasure and in order to have a better understanding of the financial markets. My only regret is that I did not take this earlier,

  15. Budgets and Budgetary Controls Had a good experience with this course ,The implementation of the demo site was very useful for hands on learning and visual learning. I learned the basic functions of this analytical tool but I feel confident in being very successful in a career with completing this course

  16. Budgets and Budgetary Controls I learned a lot from this course. This course really help me to understand and analyze about marketing.It highlights the need for adjustment of the performance,

  17. This Content is best for those who really want to learn about budgetary control techniques. The instructor was excellent. I did not feel any difficulty to understand his language or concept.

  18. This blog is very imformative.all about budgetary control techniques.Basically, a great course. Very brief introduction into BA’s work,and very well taught. Huge thanks to Ken. Loved the course.

  19. Thank you HENRY HARVIN for this platform. i would like to refer this platform with other.In the following analysis, Budget is prepared for each and every department. Further, a comparison is made between the actual and estimated accounting figures. With the help of this technique, variances are found. The variances are further divided into Favourable and Unfavourable Variances.

  20. The top blog for setting up a budget and keeping tabs on expenditures. Excellent information for when I take this course. All newbies who are drawn to this programme should take note of this, in my opinion. As a result, you should register for this course at the HENRY HARVIN institution. This is the ideal platform for professional development.

  21. It serves as a tool for decision making as it provides clarity with respect to revenues and expenses.It helps for financial system. Get good results for this blog.

  22. Rubi Disuza Reply

    Best Blog From Henry Harvin. Its highly recommend for those people who are till thinking which is good for them. I just want to appreciate the entire writing team for making this content on the topic of the Budgets and Budgetary Controls.

  23. Chahat kumari Reply

    The best blog for creating this budget and controlling spending. The information was excellent for when I take this course. I want to recommend this to all newcomers. who is drawn to this programme. Thus, you ought to enrol in this course at the HENRY HARVIN institute. The best platform for career growth is this one.

  24. it is very valuable blog which is showing me what path is correct for me. i appreciate all the word and effort, thank you henry harvin

  25. And after some days later I watch their blogs , My concepts and doubts also is cleared in so easy method . I appreciated their work .

  26. It is very helpful for my career because I am a student of commerce background. I am getting a very good quality of course content related to my skills.

  27. Best blog for preparing this Budget and budgetary control. That was a great information for when i do this course. I would like to recommended you all beginners. Who is interested in this course. This course golden opportunity for you.

  28. Hi I am hunny , Thank you explaining me your valuable points on this Budgets and Budgetary Controls. Your information is so helpful for me. Great experience and great knowledge you share with us.

  29. I appreciate you providing me with such useful knowledge. On the subject of budgets and budgetary restrictions, all of your proposals are excellent. I highly respect both your work and your experience.

  30. Hello, I’m Karishma. Their blogs’ explanations of budgets and budgetary controls are excellent. I absolutely appreciate their approach of instruction and explanation.

  31. Thanks for sharing such valuable information. It is very helpful for my career because I am a student of commerce background. I am getting a very good quality of course content related to my skills.

  32. I have read so many articles on the topic of Budgets and Budgetary Controls but this article is truly a pleasant article, keep it up.

  33. Thank you so much for such a great Budgets and Budgetary Controls. I am glad that I found your site and visit on it. I really want to appreciate you and all the best for future planning.

  34. Navika Gautam Reply

    HI, I am Navika Gautam this blog very nicely explains Budgets and Budgetary Controls. I apricate your effort and understanding.

  35. Rajat Malhotra Reply

    Thanks, I really found this blog very interesting. Your article is also very useful.

  36. Hi I am Sonakshi. My brother is recommended for this blogs for clearing concepts in budget and Budgetary controls . And after some days later I watch their blogs , My concepts and doubts also is cleared in so easy method . I appreciated their work .

  37. Their explanation in there blogs about of the Budgets and Budgetary Controls is so good . I really like there way of explanation and teaching method also.

  38. Tanavi Kamble Reply

    Well paced and organized blog. I learned a lot of concepts and principles for Lean budget and many tools to use in the future.

Join the Discussion

Interested in Henry Harvin Blog?
Get Course Membership Worth Rs 6000/-
For Free

Our Career Advisor will give you a call shortly

Someone from India

Just purchased a course

1 minutes ago

Noida Address:

Henry Harvin House, B-12, Sector 6, Noida, Uttar Pradesh 201301

FREE 15min Course Guidance Session:

Henry Harvin Student's Reviews
Henry Harvin Reviews on Trustpilot | Henry Harvin Reviews on Ambitionbox |
Henry Harvin Reviews on Glassdoor| Henry Harvin Reviews on Coursereport