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Type of Budgeting Methods There are two establish method for budgeting: top-down and bottom-up which is best for your project depends on your organization’s standard approach to decision making. Does management dictate most mandates? Or is the staff expected to produce ideas and decision that percolate up to management for final analysis? Your answer to this question will determine the most likely budgeting approach for the project.(G. Michael, 2007). Bottom-up Budgeting In bottom-up budgeting, staff members get together and attempt to hammer out a budget from the task-level detail. As a group, they can speak frankly one member might have a solution that’s superior to other. It’s also a good way to avoid missing a subtask. If any group member forgets it, another (hopefully) will remember it. This helps avoid budgeting-gobbling tasks appearing mid-project and throwing everything off down the line.
Top-down Budgeting More difficult then bottom-up management, the top-down approach has senior managers estimating budgets from their experience and then allocating funds to lower-level managers for execution. Top-down budgeting works if managers carefully allocate cost and possess significant project management …show more content…
A budgetary control system can help in the following areas. You are likely have identiflied some of these, as well as possibly others specific to your organization.
Planning
A formal system of budgetary control enables an organization to carry out its planning in a systematic and logical necessary.
Control
Control can only be effected by drawing up a plan of what is to be achieved in a specified time period with managers regularly monitoring progress against the plan and taking corrective action where necessary.
Co-ordination
By drawing up plan. The activities of the various fuctions and department can be co-ordinated. For example, the production manager can ensure that the correct quantity is manufactured to meet the requirements of the sales teams, or the accountant can obtain sufficient funding to make adequate resources available to carry out the organization’s activities, whether this is looking after children in care or running a railway network.
Type of Budgeting Methods There are two establish method for budgeting: top-down and bottom-up which is best for your project depends on your organization’s standard approach to decision making. Does management dictate most mandates? Or is the staff expected to produce ideas and decision that percolate up to management for final analysis? Your answer to this question will determine the most likely budgeting approach for the project.(G. Michael, 2007). Bottom-up Budgeting In bottom-up budgeting, staff members get together and attempt to hammer out a budget from the task-level detail. As a group, they can speak frankly one member might have a solution that’s superior to other. It’s also a good way to avoid missing a subtask. If any group member forgets it, another (hopefully) will remember it. This helps avoid budgeting-gobbling tasks appearing mid-project and throwing everything off down the line.
Top-down Budgeting More difficult then bottom-up management, the top-down approach has senior managers estimating budgets from their experience and then allocating funds to lower-level managers for execution. Top-down budgeting works if managers carefully allocate cost and possess significant project management …show more content…
A budgetary control system can help in the following areas. You are likely have identiflied some of these, as well as possibly others specific to your organization.
Planning
A formal system of budgetary control enables an organization to carry out its planning in a systematic and logical necessary.
Control
Control can only be effected by drawing up a plan of what is to be achieved in a specified time period with managers regularly monitoring progress against the plan and taking corrective action where necessary.
Co-ordination
By drawing up plan. The activities of the various fuctions and department can be co-ordinated. For example, the production manager can ensure that the correct quantity is manufactured to meet the requirements of the sales teams, or the accountant can obtain sufficient funding to make adequate resources available to carry out the organization’s activities, whether this is looking after children in care or running a railway network.