Limitations of Budgetary Control
- The preparation of a budget under inflationary conditions and changing Government policies is really difficult. Thus, the accurate position of the business cannot be estimated.
- Accuracy in budgeting comes through experience. Hence it should not be relied on too much in the initial stages.
- Budget is only a management tool. It is not a substitute for management in decision making.
- Budgeting involves heavy expenditure, which small concerns cannot afford.
- There will be active and passive resistance to budgetary control as it points out the efficiency or inefficiency of individuals.
- The success of budgetary control depends upon willing cooperation and team work. This is often lacking.
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