Question

Write two advantages of budgetary control.

Hint:

A well-maintained budget ensures that an organization can allocate resources efficiently and avoid financial mismanagement.

Answer 1

Budgetary control is a key management tool used to monitor and control an organization's financial resources. It involves setting financial targets and comparing actual performance with the budgeted figures to identify variances and take corrective action. Two advantages of budgetary control: 1. {Improved financial control:} Budgetary control ensures that funds are used efficiently, helping to prevent overspending and waste. By setting clear targets and monitoring performance, businesses can maintain financial discipline. 2. {Better decision-making:} Having a budget in place allows management to make more informed decisions by providing a clear overview of available resources, expected expenses, and potential savings. It enables managers to plan effectively and allocate resources optimally. Conclusion: Budgetary control helps organizations stay within their financial limits and make better-informed decisions, contributing to overall financial health.
Final Answer: \[ \boxed{\text{Two advantages of budgetary control are improved financial control and better decision-making.}} \]