PurposeThe capacity to plan, manage and control small and medium-sized enterprises (SMEs) is critical to realising their organisational goals. This paper assesses the effectiveness and perception of budgeting and budgetary control systems among SMEs.Design/methodology/approachRelying on the goal-setting theory (GST) and a methodology that accommodates questionnaires, data were collected from 170 manufacturing SMEs located in Cape Town, South Africa.FindingsResearch results affirm that the deployment of budgeting benefits from a positive perception of the value of budgeting and budgetary controls by key SME stakeholders. The study also finds that the perception of budgeting mirrors the level of education of SME operators, as educated respondents understand the value of implementing robust budgeting systems. Despite its focus on manufacturing SMEs, this study suggests that the manufacturing budget is the least utilised budgeting system among these organisations.Practical implicationsThe study reinforces the communication power of budgeting and budgetary controls as SMEs and economic agents are not only aware of corporate objectives but are equally incentivised to support the attainment of these objectives.Originality/valueDespite the extensive application of GST among scholars, its use in budgeting and budgetary control literature, particularly among SMEs in developing contexts, is limited. In line with GST, this study indicates that when agents establish and implement a plan, they are motivated to pursue and realise the set expectations while consistently evaluating themselves for improvement opportunities.

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