What is Budget control system?

A budgetary control system is a method of monitoring and controlling income, and expenditure and for managing the demands for cash, minimising borrowings . It can be applied in a business context or by an individual in relation to his or her personal finances. In a business environment it is most valuable as a tool to control the flow of cash because a good system would monitor cash inflow and flag-up any projected shortfalls so that corrective action could be taken, for example if some customers were habitually not paying promptly or there was a sudden and unusual need for spending. Additionally, such a system would also ensure that cash was always available for essential business purposes like buying raw materials.

In Finance Term, Analyasis the expenses where we need to execute, then audit where we are  goint to applying as to budget as expenses, capital, assest or out of expenses.

In Production Term, forcast the sale and procure the raw material to production accordingly to reduce working capital.

 

A budgetary control system is a method of monitoring and controlling income, and expenditure and for managing the demands for cash, minimising borrowings . It can be applied in a business context or by an individual in relation to his or her personal finances.