Tom Luxsox Coins

Average Circulated

There are two methods commonly used to prepare the financial budget spreadsheet. These two methods are "Bottom Up Budget" and "Top Down Budget". Both methods share the same goal of producing an accurate budget Financial Spreadsheets.

Bottom Up Budget

In the "Bottom Budget up "method, the company let all departmental managers (heads of delegation) to come with their own budget worksheet justified by formulas, research and plans. The heads of delegation will first review the worksheet. Once they have completed the worksheets will submitted to the Financial Planning Unit for further consideration. During this review process, the budget figures will be refined. During this review stage, it is quite common for spreadsheets to enter and exit between the respective departments and financial planning unit.

Once the Financial Planning Unit completed the worksheets, it will be submitted to the Board of Directors (BOD) for final review and approval final. During the review by BOD, there may be even flow spreadsheets to and from the rear of the BOD. But the frequency of these would very small at this point. Once the BOD finalized budget figures, spreadsheets, financial budget shall be final and ready to be implemented by the respective departments.

Top Down Budget

Top Down in the budget, financial planning unit uses reports Historic such as balance sheets and profit and losses, rose with spreadsheets preliminary budget. Financial planning man held a meeting with all Heads of Delegation and BOD and presents preliminary worksheets to all. At this meeting, the worksheets will be discussed and refined to the satisfaction of the meeting. Once the meeting ended, the worksheets will be distributed to the respective departments for implementation and draw up plans to meet budget numbers.

Pro and Con

The two methods above have their pros and cons. The "Bottom Up Budget" is slow, but the spreadsheets of the budget tend to be more accurate than all levels of company personnel, from bottom to top, are involved in the preparation of budget numbers.

The budget "Top Down" is faster, but the budget worksheets are less precise than the budget numbers are decided by the high level of participation and lower level staff are limited. The impact This loss of accuracy can be minimized by the application of certain financial ratios and analysis forms to refine the budget worksheets final.

The review process may be different from organization to organization. But the main objective of the review process, which is to produce spreadsheets, financial budget as accurate as possible, is the same.

Personally, I prefer the top "Down Budget "Refine the method and analysis with various diets and formulas.

Visit http://www.budgeting-spreadsheet.com for more related articles.

Thomas Wong

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