BUDGETING AND BUDGETARY CONTROL IN A BUSINESS ORGANIZATION

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BUDGETING AND BUDGETARY CONTROL IN A BUSINESS ORGANIZATION (A CASE STUDY OF AFRI BANK NIGERIA PLC. ILORIN)  

ABSTRACT

In carrying out on investigation into an Afri -Bank of Nigeria plc, the major objective of any business Organization is base on profit maximization and improved future which leads to use of budgeting and burglary control, business organization to enhance growth and survival of the organization.

Chapter one of  this project work : Will explain what  study  of background  is all about the statement  of problems,  the aims and objectives of the study , the significant  and scope of the study , the limitation and research hypothesis and definition of terms and concept. 

Chapter two: Will review the relative literature e.g the Historical development, meaning and usefulness of budgeting and budgetary control in business   organization, 

Types and budgeting process, preparation and administration of budget, fundamental  principles and budget implementation  and control including  Budgetary improvement   techniques. 

Chapter three: this chapter will expose the research   methodology ie research design, characteristic of the study population, sampling method, research instrument and as well method of data process. 

Chapter four of this project work will simply talk of presentation interpretation and analysis of  it shows  that the organization’s  staff  agreed that  the organization prepare budget. 

Chapter five: This will be the last chapter of the research work and it‘ll summary, conclusion and recommendation and questionnaire, the reliant and useful point of action that will solve the study problems. 

TABLE OF CONTENT   

Title Page

Certification

Dedication

Acknowledgment

Table of content

Abstract

CHAPTER ONE

INTRODUCTION 

1.1 Background of the study

1.2 Statement of the problem 

1.3 Aims and objective of the study 

1.4 Significant of the study 

1.5 Scope of the study

1.6 Limitation of the study 

1.7 Research hypothesis 

1.8 Definition of terms and concepts 

CHAPTER TWO

LITERATURE REVIEW 

2.1 Introduction 

2.2 Historical development of budgeting

2.3 Meaning of budget, budgeting and budgetary control

2.4 Usefulness of budgeting in business organization  

2.5 Types of budget

2.6 Preparation and administration of budget 

2.7 Budgeting and administration of budget

2.8 Fundamental principles of budget 

2.9 Budgetary   improvement techniques 

2.10 Budget implementation and control 

CHAPTER THREE 

3.1 Research methodology 

3.2 Characteristics of the study population 

3.3 Sampling method 

3.4 Research instrument

3.5 Method of data process 

3.6 Questionnaires

CHAPTER FOUR

PRESENTATION INTERPRETATION AND ANALYSIS 

4.1 Presentation of data 

4.2 Analysis of data

CHAPTER FIVE 

SUMMARY, CONCLUSION AND RECOMMENDATION 

5.1 Summary

5.2 Conclusion 

5.3 Recommendation 

References 

CHAPTER ONE

1.1 BACKGROUND  OF THE STUDY 

The fundamental question which should be asked about any enterprises is “How well is it doing?” ad his can be rightly answered accessing the extent to which the objectives of the enterprises are achieved. 

The major objectives of the enterprises are achieved, base on profit maximization and improved future profit tend to enhance growth and survival. The increasing complexity of the   business and ever changing condition of the business environment, social environment technological   and political changes have made companies investors and management to realize the need for new techniques to protect and improve performance. 

To achieve the Afro- mentioned objects it becomes imperative for management of business organization to develop ways of attaining them.

The available instrument at Management’s disposal is the adoption of adequate planning and control. one of the basic  device  used  in planning and  controlling the activities of business enterprise is by means of financial  standard and management  of budgeting and  budgetary  control.

To many the terms can not retraining influence on action service the needs or opportunity which the enterprise   would like to service budgeting remains the most tactical budget is essentially on agenda setting. It is carefully designed, packaged and aimed at achieving the goals and objective  of business organization  or individual with the limited resources at their disposal. 

According to fubara( 1988) in his book “ business management  principle and strategies. 

He further and described budgeting is a means of utilizing collective knowledge of an enterprise to prepare  a co-ordinate  plan for future activities. 

Budgeting control is a techniques that emphasizes control of plan by companing actual result against target to identify variance upon which corrective measure should be taken to improve the performance of the enterprises.

The primary function of business organization is production of goods and services  and make it  available  for the consumers when ever is needed. All these functions are performed in order to achieve the organizations goals which is profit maximization. Performances are evaluated based on the actual result. To achieve the organizational objectives there is need for adequate planning and control, efficient budgeting and effective budgetary control system in business organization. 

1.2 STATEMENT OF THE PROBLEM 

Budgeting and budgetary control is very important  in business  organizational  due to its function in relation  to planning , organize coordinating and controlling functions of management  forwards. 

Successful realization of the organizational objective. Performance evaluation in business organization is usually base on effective decision making and efficient   resources allocation. These have been affected due to the incorporate of  budget and budgetary control.

This improper budgetary control responsible for poor performance of some business organization most business organization do prepare budget. Yet there  are deviation  from such budgets and they fail to investigate the  causes deviation and thus take appropriate  corrective  measures to prevent re-occurrence  most business organization sues budgeting as just  useful for planning purpose but refuse to take cognizance  of its benefits  whom to revise budgets to  make it reflect prevailing situation or  whom to hold  responsible for  budget vacancies.

1.3 AIMS AND OBJECTIVE  OF THE STUDY 

The main aim of this research work is to examine budgeting and budgetary control in business organization in order to see the extent to which it’s to be applied in management planning and control. 

These are some of the aims of the research work.

i. To examine the procedure for drawing up budget in business organization and to know how budget are being approved implanted, improved and revised. 

ii. To know who there budgeting and budgetary controls assist the managements of business organization effective decision making and efficient resources allocation.

iii. To know whether the use of budgeting and budgetary control is indispensable to achieve organizational goals and objective. 

iv. To evaluate performance by comparing budgetary with actual result of the business  stand  

v. To know whether budgeting and budgetary control serves as a communication tools between the top management and the low staff.

vi. To provide a useful l recommendation on the  application of budgeting and budgetary control  as means  of improving business performance. 

1.4 SIGNIFICANCE OF THE STUDY 

Several research work have been carried out on budget and budgetary control in various business organization like manufacturing  , pharmaceutical and  oil industries. 

This research work can be said to be a fair work on the topic. This research will share more light on the efficient resources and effective decision making in business organization. 

This research work can be said to be a fair  work on the topic. This research will share more light on the efficient resources   and effective decision – making in business organization. 

It will also help the student to know how relevance budgeting and budgetary control is to an individual and business organization. 

1.4 SCOPE OF THE STUDY 

This research work will examine in details budgeting  and budgetary    control  with emphasis on how  its  application  aids in planning and controlling of activities  of business organization  to enhance or improve performance. 

There are different types of  banks as a business  organization but commercial bank are the prominent  types of  business organization because  of the n umber size therefore this research work is limited  to commercial  bank with Afri Bank Plc as a case study. 

6. LIMITATION OF THE STUDY 

Firstly, this research has the limitation of financial problems in the cause of carrying out the study. 

Secondly, it was that due to time factor as the research was carried out along with academic work.  Also, detailed budgeting statement   and the corresponding actual result are not made available by the bank because of high confidentiality and very competition in the banking industries. 

However, it is the researchers believe that the finding of the research will represent the pictorial  of budgeting and budgetary control of the study. 

1.7 RESEARCH  HYPOTHESIS

The research shall focus and test the following   alternative hypothesis. 

The hypothesis is denoted with Ho alternative is denoted with Hi

i. Ho:  There is no proper budgeting and effective budgetary in business organization. 

ii. Hi: applications of budgetary control system do performance of business organization in terms of objectives realization. 

1.8DEFINITION OF  TERMS  AND CONCEPTS

Budget is a document   containing words and figures which proposes expenditure for certain items and purpose. 

Budget is a document or a collection of document that refers to the financial condition of an organization. 

Budget is also merlya plan expressed in quantitative terms. 

TERMS OF BUDGET

1. Budget cycle: Public  budgeting  system which are devise for selecting society  ends and consist of numerous participants

2. Budget preparation and submission: phase of the budget is carried out by the executive aim of the government. 

3. Budget authorization: Having compiled the various department estimates, the draft budget is new to be sent to the legislatures for authorization 

4. Executive of the budget:  Budget execution commences the moment the presidents signs the general warrant incur expenditure execution invest the transaction of financial outlays approved in the budget plants of action. 

5. Line item budgeting: Is the tradition budgeting  it is oldest types of   budget. 

6. Performance budget: was aimed at enhancing effectiveness and improving efficiency in public budgeting.

7. Planning programming budgeting system:   Approach to budgetary decision making  is a system approach  that attempts to influence the choice. 

SOME BUDGET CONCEPTS

i. Recurrent revenue: This include the year to year  revenue of government from sources like taxes fines free specific charges profit. 

ii. Capital  receipt : These are in form of loan and graint      

iii. Capital  expenditure : This involves expenditure  on productive  economic activities i.e on agricultural  road , Hospital  and  university etc. 

.

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