Differentiate between top down budgeting and bottoms up budgeting

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written 23 months ago by

Top Down Budgeting	Bottom Up Budgeting
In a top-down planning, departments must generate budgets within the constraints set forth by senior leadership	In a bottom-up budget, departments create their own budget estimates and send them to senior leadership.
Budget is decided by the top of the organization and imposes budget on the lower layer of the organization.	A budget is decided by the lower level in the organization and then given to the higher level for the approval.
It's planning takes less time.	It's planning takes more time.
One budget is created one time rather then having combined budgets from several departments	Each department makes its own budget without regard to other departments
Takes the burden off of lower management to create a budget on their own.	Here the lower management has the responsibility to create budget.
It saves time and resources	It takes more time and resources.

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