Professional Documents
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Budgets and Budgetary Control
Budgets and Budgetary Control
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CONTENTS
CONCEPT OF BUDGET WHY BUDGETS ARE PREPARED? DEFINITION OF BUDGETS KINDS OF BUDGETS MEANING OF BUDGETARY CONTROL DEFINITION OF BUDGETARY CONTROL STEPS INVOLVED IN BUDGETARY CONTROL ORIGIN OF Z.B.B. CONCEPT OF Z.B.B. OF Z.B.B.
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CONCEPT OF BUDGET
Everyone is familiar with the idea of a budget because it is essential in every walk of our life national,domestic and business. A budget is a single use plan since it is prepared for a particular period of time.
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DEFINITION OF BUDGETS
ACCORDING TO ICMA TERMINOLOGY ,LONDON A plan quantified in monetary terms prepared and approved prior to a defined period of time usually showing planned income to be generatd and expenditure to be incurred during that period and the capital to be employed to attain a given objective
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Kinds of budgets
On the basis of coverage On the basis of capacity On the basis of condition On the basis of period
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ON THE CAPACITY
1.FIXED BUDGET 2.FLEXIBLE BUDGET
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and W.H
Barr
Budgetary control is a Tool of management used to plan ,carry out and control the operations of the business
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Determination of objective. Organisational chart. Establishment of budget centres. Location of the key factor. Providing adequate accounting records. Effective communication system. Appointment of budget controller Appointment of budgeted committee of budget manual
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Zero based budgeting is a new technique of budgeting introduced first in U.S.A in a year 1969 this system of budgeting was developed by PETER PYHRR OF TAXES INSTRUMENT OF U.S.A and later on introduced by ex-president JIMMY KARTER OF U.S.A .
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CONCEPT OF ZBB
In the ZBB every year is taken as a new year and there is no need to take previous years figure as a base. In this type of budgeting budgets are prepared taking current year as zero base and current year performances are evaluated independently from previous year. Z.B.B refers to a nil budget as the starting budget.
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ADVANTAGES OF Z.B.B.
ENSURES MORE CAREFUL PLANNING BEFORE PREPARATION OF BUDGET NOT BASED UPON INCREMNENTAL APPROACH HELPFUL IN EVALUATING PERFORMANCE OF NON-MANUFACTURING DEPTT. IMPROVES CO-ORDINATION IMPROVES COMMUNICATION CHANNEL