A Comparison of Bottom-Up and Top-Down Budgeting

Despite the wide variety of tools and software to assist with budgeting, when it comes to budgeting for any home, small business, or larger company, there are really only two approaches: bottom-up (the traditional method) and top-down.

Research the concepts of a bottom-up approach to budgeting and a top-down approach.

Based on your readings for this week, respond to the following:

• What are the advantages and disadvantages of each budgeting approach?

• Which do you think would be most effective? Justify your answer.

• Provide an example of each type of budgeting.