![]() As a result of the budget control, management may decide to amend the budget to change specific budget items and their values in view of specific unplanned circumstances and/or events such as a new unplanned project, a disaster event, etc. The Budget Control (BC) process is used to monitor the actual financial performance of the company against the Budget, where revenues, expenditures, and capital investments are monitored against the Budget to ensure that the goals of the budget are met and complied with. The outcome of the Budget Planning process is a budget plan, known as the Budget and includes projected Assets, Liabilities, Expenses, Revenues, and Capital Investment for the budget period. The company finances are projected based on previous period financial performance and based on projected future investments, revenues and expenditures. The Budget Planning (BP) process consists of projecting the company’s finances for a specific future period. Together they are known as Budget Planning and Control (BPC). In summary, Budgeting or Financial Budgeting comprises three processes: ![]() The purpose of budgetary planning and control is to mitigate the risk that an organization’s financial results will be worse than expected. The Budget Control is used to monitor the business performance and operation against the Budget. Once the budget is prepared the Budget Control process starts. However, some organizations may use different budget periods, such as Quarter, 6-Months, 2-Years, 5-Years, etc. Most organizations have a year based budget. The budget is usually prepared for one full year, which can be calendar year or fiscal year, this is known as the Budget Period. Budget planning is the process of developing a financial plan of the organization, known as the Budget, which projects future revenues, assets, liabilities, and expenses of the organization.
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