Budget Manual, Budget Period and Key factors of Budgetary Control

Budget Manual, Budget Period and Key factors of Budgetary Control

1. Name : S.Karunya Roll NO : 21PK08 Class : II M.Com Topic : Budget Manual, Budget Period and Key Factor of Budgetary Control

2. Budgetary Control Budgetary Control means comparing actual income and expenditure to planned income or expenditure to identify whether or not corrective action is required.

3. Budget Manual A budget manual is a document which spells out the duties and also the responsibilities of the various executives concerned with the budgets. Budget manual helps to avoid doubts in any works or powers and responsibilities etc…

4. Budget Manual Covers: It defines the objectives of the budgetary control system. The duties and responsibilities of various person. The financial powers of different managers for enabling the spending of amount on various expenses.

5. Continue… The length of various budget periods and control points to be clearly given. The procedures to be followed in the entire system should be clearly defined. Budget centres involved should be clearly stated.

6. Continue… A method of accounting to be used for various expenditures should also be stated in the manual. For example : Written down value method or Straight line method for depreciation.

7. Budget Period: Budgets usually relate to annual reporting years or natural business cycles. Annual budgets are frequently divided into monthly and quarterly components.

8. Continue… Some costs are merely proportional amount. Example: Rent Some costs are not merely proportional amount. Example: Fuel. Major capital expenditure budgets may transcend many years.

9. Key factor: The key factor is also called as limiting factor. The key factor means the factor which limits the size of output.

10. I) Sales: Low market demand. Shortage of experienced salesman. II) Materials: General shortage and seasonal shortage. Restrictions imposed by licenses, quota etc.

11. III) Plant: Limted Capacity to generate output. Chance of repairs in plant. Iv) Management: Shortage of experienced executives. Little knowledge of know how not having the vast knowledge.

12. Thank You