Budget may be defined as financial expression of the goals to be achieved. The main objectives of this section is to estimate the main sources of income and heads of the expenditure of the corporation in advance so that income can be increased and expenditure can be controlled.
In order to ensure the objectives the following controls are established
- Prepare monthly budget.
- Prepare quarterly budget.
- Prepare yearly budget.
- If the actual income and expenditure are confirmed to the budget there is no action likely to be taken.
- If the actual income and expenditure are directed from the budget then the corrective actions are taken