Question

How can policies and procedures control spending?(Plz type up ur answer)

Answer 1

If there was no policy or procedure designed, it is vague for a person to spend where and what amount. Spending will not be under his control.

Once some policies are designed or procedures are lined up, there would be an action of following the same to achieve the desired results. Though spending might not be controlled at some cases, but there would be a brief idea about where to spend and approximately what amount is to be spent over there. Small business owners often create procedures and policies for petty cash to curb out-of-control spending. There would be instances where Budgets are also prepared as a part of annual financial policy and it is an effective tool to check on expenditure.