Explain the difference between Budget And Budgetary Control

In examination question, under short question, candidates are being asked the difference between budget and budgetary control.

Tabulate below the major differences:

A Budget

Is a predetermined statement of a company’s objectives during a period of time.

The budget is like a plan which guides the managers who are responsible for achieving certain business objectives.

The budget normally has an overall or master budget which is made up of sectional/subsidiary budgets prepared by the different sections in the company.

Be careful that a budget is a plan but a forecast is merely a prediction of what will happen as a result of a given set of circumstances.

Budgetary Control

Is a system which uses the budgets for planning and controlling a business activities.

It quantifies and is financially oriented to guides the managers to achieve certain business objectives..

Managers will compare the actual with the budgeted figures and the variances will then be investigated and corrective actions be taken