Profit Planning and Budgetary Control.

Abstract The operating budget is a very highly polished instrument of management control. An operating budget when properly constructed is a master plan of not precisely what is going to happen, but a plan of what will have to happen in accepted measures of activity during an operating period if certain profit results are to be achieved. Clearly, the first value of a budget is that it is an aid to management in eliminating waste and in directing the course of the business along profitable lines, that is, in identifying loss operations so that such conditions can be remedied. The next value which shall be discussed is developing leadership. The third "beyond value" of a properly constructed operating budget shall be teamwork. The fourth value of an operating budget shall be to call a more positive attitude toward business operations. The fifth and final "beyond value" in an operating budget is the courage decision. Nevertheless, good accounting is an indispensable force in business progress. Through good accounting weakness and waste are made apparent; it keeps inefficiency from being concealed in total profit figures; it gives the "beyond values." Every business, surely, should have the illumination and the unity which disinterested accounting knowledge can provide.