A Look At Top-Down Budgeting

There are two major approaches to coming up with a budget for a business or for an individual project: top-down budgeting and bottom-up budgeting. While bottom-up budgeting is the more traditional way to approach budgeting projects and companies, top-down budgeting began to be more popular among businesses and the government during the 1990s. Top-down budgeting is more often resorted to by companies and the government in times of fiscal stress. Top-down budgeting has several advantages over bottom-up budgeting, along with several disadvantages when compared to bottom-up budgeting.