Difference between budget and budgetary control key difference
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Budget vs Budgetary Control
Budget is an estimation of revenues and costs for a period. Budgetary control is the process where budgets are prepared at the beginning of the accounting period to compare and analyze the actual results at the end of the accounting period.
Time Period
Preparation of the budget occurs prior to the beginning of the accounting period. Decisions relating to budgetary control will be taken at the end of the accounting period.
Inclusion of Revenues and Costs
Estimations of revenues and costs will be included in budgets. Both estimations and actual revenues and costs will be included in budgetary control
Summary- Budget vs Budgetary Control
The difference between budget and budgetary control is that while budget is the tool used as an estimation of revenue and costs, budgetary control is the process used to evaluate the budgeted results. Thus, budgets allow better resource allocation and budgetary control facilitates cost control and effective target setting. However while useful, budgets are heavily dependent on forecasts, which may or may not be predictable. Further, both budget preparation and budgetary control are time-consuming and costly to implement. Situations such as unforeseen changes in demand and sudden rise in raw material prices can make the estimations less productive.
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