THE ROLE OF BUDGET AND BUDGETARY CONTROL IN ORGANISATION

THE ROLE OF BUDGET AND BUDGETARY CONTROL IN ORGANISATION (A CASE STUDY OF NIGERBOTTLING COMPANY ENUGU PLAN

ABSTRACT        

This research work focus on the role of budget and budgetary control in organization. It reveals that in organization budget and budgetary control provides management with information which enable the organization to make effective decision and it encourage the practice of budgeting and budgetary control in ascertaining whether budget contains the right basis for planning and controlling businesses. It emphasizes that without budget and budgetary control in organization management goals and objective cannot be achieved. The researcher also designed questionnaire based directly on these research question. Twenty questionnaires were administered to workers and managers and eighteen were returned to workers. The research analyzes data collection using percentage (%) for easy understanding. Based on the finding it was concluded that budget and budgetary control is important to the management because it ensure the organization growth and continuous existence of an organization.

Thus the research therefore suggested that every organization should appropriate budget and budgetary control to provides information to management which will enable them make sound decision

CHAPTER ONE

  • INTRODUCTION
  • BACKGROUND OF THE STUDY

Budget is a financial or quantitative statement prepared prior to a specific accounting period, containing the plans and policies to be pursued during that period. On the other hand, it may be regarded as a plan expressed in financial and quantitative term which may include: income, expenditure and use of capital.

Put in another way, budget is a financial plan that helps people to make the best possible use of their money.

It identifies sources of income and assists in planning expenditures. Nevertheless, because of variation, income and expenditure in budgeting must consist of at least part of estimate.

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Another way of defining budget is a plan qualified in monetary terms, prepared and approved prior to a defined period of time usually showing planned income to be generated and for expenditure to be incurred during that period and capital to be employed to attain a given objective “says the institute of cost and management accounting (I.C.M.A).

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It aids co-ordination and implementation can be formulated for the organization as a whole or any sub-unit (sales, production, financial unit etc) of an organization and also enhances co-ordination of activities.

With the explanation above, it can be understand that budget range from Nation, industries, firms, companies, families and even individuals. Budget therefore, can only be effectively formulated where there have been a clearly defined objectives or goal. Based on this fact, budget needs people.

For a successful budget, congnizatice of those who will operate each state of the budget is important to note. Also their position in the organizational chart of the organization can   never be an effectively authorize and delegate responsibilities to the staff concern so as to enable them discharge duties in the implementation of the budget requirement.

The comparison, following closely for budget plan is what can budgetary control of an establishment. The institute of cost accountants once again defines it as the establishment of budget relating to responsibilities of executives to the requirements of policy and continuous comparison of actual with budgeted results either to secure by individual action, objectives of that policy not enough to plan but in order that, your plan will not be abortive, there is need to follow plans with adequate action for maximum returns.

  • STATEMENT OF PROBLEM

This centre on the study of problems associated with new products development strategies in Nigeria Bottling Company (NBC)

Some of these basic problems are as follows:

  1. Inadequate budgeting
  2. Lack of financial resources to ensure continuity of budgeting
  • Budget deficiencies
  1. Poor timing of budgeting
  2. Excessive use or stock out could lead to business poor performance
  3. Minimize budget variances.
  • Costs and maximize efficiency

Dearth of budgeting and budgetary control has only led to delay in management of organisation.

It has also caused waste of money and not being able to achieve their goals.

To solve these problems above, it is wise for budgeting and budgetary control.

  • OBJECTIVES OF THE STUDY

The purpose of this study is outline below:

  1. Ascertaining whether budget contains the right basic for planning and controlling businesses.
  2. To encourage practice of budgeting and budgetary control.
  • To uncover budget problems and solution
  1. To know the position of budget in our organisation.
  • SIGNIFICANCE OF THE STUDY
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The significance of this research cannot be over emphasized as it will touch all aspects of budget and budgetary control in management of the organization. The significance of the study includes the following:

  1. The study is expected to help educate more business organization especially the production and manufacturing sectors to see the urgent need of using budget and budgetary control in the organization.
  2. Information gained from this study, serve as a useful guide to all organization that are still making use of rough estimate of production, on adopting proper budget and budgetary control.
  3. The study also stress on the importance and advantages of budget and budgetary control in the organization.
  4. Budgets act as a guide for management decision in an organization.
  • RESEARCH QUESTIONS

Since organization goal can only be achieve when there is no deviation from their plan budgeting and budgetary control is very important to every organization, firms, individual etc.

  1. To what extent has budgetary control helped to achieve organisation goal?
  2. To what extent has the firm accepted the firm’s budgetary control?
  • To what extent has budgetary implementation affected the organisation?
  1. To examine the effect of budget and budgetary control?
    • SCOPE OF THE STUDY

The study is limited to companies engage in bottling operations Enugu plants. The study covers accounting for

Upstream bottling activities and bottling operations, and taxation of bottling companies.

  • LIMITATION OF THE STUDY

The main constraint to this study has been that of insufficient time, the duration allocated to the study was short that enough available information were not collected.

Another constraint is the scarcity of material and journals. More so, the researcher found it difficult to move from place to place in search of adequate data due to lack of adequate finance.

  • DEFINITION OF TERMS

BUDGET:   It is a financial or quantitative statement      prepared prior to a specific accounting period containing the plan and policies to be pursed during that period.

FIXED BUDGET: Is a budget which specific standards are sent with no allocations for rigid and unrealistic fixable budget appreciate that human system are not usually perfect and therefore designed to adjust the permitted cost level to suit level of activity actually attained.

BUDGET PERIOD: There is no fixed period for budgeting. The nature of the business will determine the length of time the budget should last.

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BUDGETARY CONTROL: Is the establishment of business of budgets relating to the responsibilities of executives to the requirement of policy and the continuous comparison of actual with budgeted results either to secure by individual action, the objectives of that policy or to provide a basic for its revision

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