As a consultant, a client has approached you to set up a budgetary control system in their organization. WHAT sequential steps would you follow to…

The following steps are necessary for establishing a good budgetary control system: 1. Determining the objectives to be achieved, over the budget period, and the policy or policies that might be adopted for the achievement of these objectives. 2. Determining the activities that should be undertaken for the achievement of the objectives. 3. Drawing up a plan or a scheme of operation in respect of each class of activity, in quantitative as well as monetary terms for the budget period. 4. Laying out a system of comparison of actual performance by each person, or department with the relevant budget and determination of causes for the variation, if any. 5. Ensuring that corrective action will be taken where the plan has not been achieved and, if that is not possible, for the revision of the plan.