Being as one Of the most important administrative tools, a budget serves as a Lana of action for achieving measured goals, standard for measuring performance and device for coping with probable adverse situations. In short, it is a blue print of projected plan of an action of a business for a definite period of time. A budget is prepared to have effective utilization of funds and for the realization of objective as efficiently as possible. Budgeting is a powerful tool to the management for performing its functions, such as formulation plans, coordination activities and controlling operations efficiently.

Budget and gadgetry control provide a set of basic technique sues for planning and control. According to Institute of Charted Management Accountants, England ” A plan quantified in monetary term prepared and approved prior to a defined period of time usually showing planned income to be generated and to be incurred during that period and the capital to be employed to attain a given objective. ” Organizational control is the process of establishing and maintaining authority over and throughout an enterprise.

The organizational control process within a larger business typically requires the use of systems that assist a manager in analyzing considerable amounts of data about how the business and its employees are functioning in order to make appropriate administrative decisions. No system of planning can be successful without having an effective and efficient system of control. Budgeting is closely connected with control. The exercise of control in the organization with the help of budgets is known as budgetary control. The process of budgetary control includes establishment of budget for each function and section of the organization.

It is the management responsibility to perform the specific tasks so that objectives Of the enterprise may be attained. Continues comparison of the actual performance with that of the budget and placing the responsibility of executives for failure to achieve the desired result a given in the budget. The management might consider taking suitable remedial action to achieve the desired objective if there is a variation of the actual performance from the budgeted performance. Revision of budgets in the light of changed circumstances.

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