What is budgetary control?

nightshade Registered Posts: 33 Epic contributor 🐘
Ok, so I'm having a bit of a blond moment.

I'm studying budgeting and want to make sure I'm well prepared for the questions that require a typed answer. The feedback document for this exam says that for the first question, students may be tested on "Explain the relationship between budgetary control, product life cycles, forecasts and planning."

I'm all over life cycles and forecasts and planning, but I could really use being able to clear up budgetary control. My text book doesn't list it as a separate thing, but does talk about control under the purpose of budgets. It runs through the comparing of actuals to budgets and reporting variances to management, which I'm fine with, but is this what's meant by budgetary control? I would have thought that this was more to do with forecasts (as my job is comparing forecasts to the corporate plan - not much point in doing a forecast if you're not going to compare it to actuals).

Or, are we getting at control of the business through the use of budget and variance comparisons (sacking lazy staff and such :lol:)

I've studied this unit to death, but I think the terminology is throwing me a bit! Any help appreciated.


  • Nps
    Nps Registered Posts: 782
    It sounds to me like you know your stuff already. Budgetary control is surely just the umbrella terminology for everything you have already described - setting a budget using the info available such as life cycles, forecasts etc, monitoring that budget, and then analysing it through the use of variances etc.
  • guinea pig
    guinea pig Registered Posts: 402 Dedicated contributor 🦉
    I googled Budgetary Control out of interest, and one definition is;

    Methodical control of an organization's operations through establishment of standards and targets regarding income and expenditure, and a continuous monitoring and adjustment of performance against them.
    (from businessdirectory)
    With level 4, I often found it helpful to get more information to give a bigger picture.
    Good luck.
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