The Role of Budgetary Control in Management Decisions: A Study

One of the most important tools of modern management accounting is budgetary control, which is a system in which an organization plans, accounts and controls its monetary resources against the overall goals within its organization. The research method used in this study is descriptive and analysis, data obtained from primary data from respondents who are managers, accountants and financial officers of the selected manufacturing and service companies as well as secondary data from published financial reports, academic journals and databases. The results show that there is a statistically significant positive effect of budgetary control on managerial decision quality, organizational performance, and cost efficiency. Variance analysis proved most popular, being used regularly by 78.3% of the organisations surveyed. Additionally, the study proves that firms that have high quality budgetary control system exhibit an average cost efficiency of 23.6% higher than those that have low quality or do not have budgetary control system at all. The study also shows that some of the major setbacks to good management of the budget are lack of staff training, resistance to participation in the budget and information asymmetry. Some of the recommendations are that institutional mechanisms of participatory budgeting processes should be ensured, a budgetary culture of financial accountability should be promoted through all organisational levels, and that the use of real-time variance reporting, based on technological solutions, should be encouraged.