What is Budget Control? Definition of Budget Control, Budget Control Meaning and Concept
Budget control refers to all activities aimed at balancing the income and expenses account of an organization.
In the strictest scope, budgetary control refers to the activities, controls and tools to keep the public accounts of an administration settled. All this, with the aim that expenses do not exceed income. Well, if this happens, there would be a deficit situation. In addition, in the same way, that there are no more resources than necessary to finance the expenditure items (surplus).
The budget is the main and basic element in planning the accounts of an organization or administration. Since, from this, it is possible to foresee the expenses that we are going to have in an exercise. All this, based on the actions that are planned and the way in which they will be financed, via taxes and other tax, recurring or extraordinary income.
Based on budgetary control, it is possible to anticipate and study deviations that may arise in the execution of the budget. To do this, taking measures periodically when imbalances and instabilities arise in obtaining income or expenses that have skyrocketed.
Budget control utilities
- The possibility and opportunity of comparing, in a total way in an exercise or by periods, the real execution data with the objectives initially set.
- Flexibility in decision-making, derived from the progress of activities, so that it is possible to alter forecasts and change tasks and items depending on the status of the budget.
- Control and effectiveness of the measures adopted during the budget as well as quantify the possible differences.
Budgetary control is of vital importance for any organization. Since it serves us as a follow-up and analysis of possible deviations in the planning of the exercise, and in addition, it supposes the continuous updating of the planning and reorganization of the accounts and financial sustainability of any center.