Imagine that you have just completed your first budget as a new financial manager. How will you make sure that your company follows the budget?

What will be an ideal response?

After the budget is developed, it must be compared periodically to the actual performance of the company. It is very important that management compare actual performance regularly to the budget. This generally occurs every month. Without such a comparison, it is hard to determine whether the company is actually performing as expected. If the actual numbers generated by the company closely match the budget, this shows the company is fulfilling its plans. On the other hand, if the actual numbers differ greatly from those projected by the budget, this indicates that corrective actions must be taken.