Controlling is the process management goes through to ensure plans are being implemented appropriately by evaluating performance and taking corrective action. This process involves looking at what was expected or intended to happen and then what actually has occurred.
The Control Process
- Establishing performance standards. This stage looks at what specific performance will be assessed and what the organisation can realistically expect to be achieved.
- Measuring actual performance against those standards. This is done through the collection of reliable data.
- Make changes where necessary. If performance can be improved then changes should be implemented so this can occur, however if performance standards are being achieved it may not be necessary to make any changes.
Types of Control
- Financial Controls refers to the ability of an organisation to ensure that cash is being spent on business expenses and the management of the organisation’s costs and expenses relative to budgeting. Examples of financial controls include budgeting, accounting systems and external audits.
- Cost Controls relates to the appropriateness of the organisation’s expenditures and the efficiency at which the cash of the organisation is spent. Cost controls help to ensure that standards are met.
- Non-Financial Costs. Examples of non-financial cost can include establishing performance standards and time controls.
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