A budgetary control system is a method of monitoring and controlling income, and expenditure and for managing the demands

for cash, minimising borrowings . It can be applied in a business context or by an individual in relation to his or her personal finances. In a business environment it is most valuable as a tool to control the flow of cash because a good system would monitor cash inflow and flag-up any projected shortfalls so that corrective action could be taken, for example if some customers were habitually not paying promptly or there was a sudden and unusual need for spending. Additionally, such a system would also ensure that cash was always available for essential business purposes like buying raw materials. A Study of Budgetary Control System as a Tool of Finance Control Need and Importance Budgetary control is a strong tool of business is to maximise profits. Themanagement is therefore always trying to focus on the proper planning, effectivecoordination and control in order to maximise profits. There are various managerialtools and techniques useful for the management to plan and control businessoperations. Budget is also used for the management to plan and control businessoperations and it is widely used as a standard device of planning and control. Budget provide as a valuable aid to management through planning, coordinationand control. It is a tool which measures the managerial performance of anorganization. It promotes good morale and generates harmony in the organization.Also it promotes efficiency and facilities management by exceptions. It helps inpromoting a feeling of cost consciousness among the employees in the organization. On the other side, as a budget is based on estimates, it may or may not be true. Itis not substitute of management because, the efficiency and utility of the budgetarysystem depends on the skill and experience of the management. It cannot beexecuted automatically because continuous efforts are necessary for the executionof the budget. In case of the manufacturing organizations, the estimation about the future is veryimportant for the production activities as huge amount of costs are invested in thesame activity. Especially the medium scale manufacturing organizations have theirkey customers & these customers are the large scale manufacturing organizations.The medium scale engineering industries are numerous. These types

of industriesmanufacture their products as per the demands & requirements of the large scaleindustries (key customers). The large scale & continuous demand (& supply) isthroughout the year. For this purpose, the production budget & budgetary controlon the same function becomes very essential. Through learning the budgetary control system in the production division, the saidfunctional area can be studied in the lights of cost ascertainment & control,activities & the actual performance.