Budgetary control

Budgetary control is a method of company control in which actual results (incomes and spendings) are compared with planned values. The reason for planning is to predict future changes on the market, supply, demand, company performance, prices and optimize operation of the company to get the best results. The budgetary control system identifies whether plans are followed and where deviations can be found.

Budgetary control can be used in order to analyze formed periods (made after end of the period). If any deviations (positive or negative) occur, top management can modify strategy and define new planned values or new route to achieve them. In modern economy budgetary control after the period ends is not enough. Most of management information systems used today is able to show results live or 1-2 days later. That enables managers to act quickly, before major problems arise. That approach is also known as continuous budgeting.

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