Bottom-Up Budgeting The bottom-up b

Bottom-Up Budgeting The bottom-up budget includes all managers with budget responsibility in the budget-creation process. Managers with direct operating responsibility for achieving goals develop a budget based on their knowledge of operating costs and provide the information to senior managers who have a view of the big picture for the organization.One advantage of this process is the commitment of operating managers to a budget they helped to create. Disadvantages include the amount of time required, the lack of awareness of the organization’s big picture on the part of operating managers, and initial budget requests that may be unrealistic.Parallel Budgeting A parallel budget includes elements of both the top-down and bottom up approaches: senior management provides broad guidelines for operating managers to follow in creating budgets for individual departments. This approach gives operating managers a context for developing individual budgets that are more realistic.