After setting performance standards, the next step in the controlling process is measurement of actual performance. Explain this step in the process of controlling.

The next step is measuring the performance: It is necessary to measure performance in all key areas of business periodically and at such intervals, the defects should be discovered before much damage has been done. Measurement of performance must be done in a simple, clear, rational, reliable and relevant manner according to the nature of activities. For example, the performance of the sales department may be measured by accounting ratios, gross profit ratio, etc.

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