View source for Top down budgeting

{{infobox4
|list1=
<ul>
<li>[[Centralized purchasing]]</li>
<li>[[Budget manual]]</li>
<li>[[Management by exceptions]]</li>
<li>[[Front line management]]</li>
<li>[[Coaching and mentoring]]</li>
<li>[[Quality system in local government]]</li>
<li>[[Project sponsor]]</li>
<li>[[Achievement oriented leadership]]</li>
<li>[[Audit]]</li>
</ul>
}}
'''Top down budgeting''' is a [[planning]] [[system]] in which the budgeting [[process]] starts. In this system, the flow of [[information]] starts from the top of the [[organization]] and then goes to the lower levels of the organization. The information group contains templates to be filled out when translating budgets, guidelines that are used by managers and an outline of goals for a specific year. Top down budgeting and [[bottom up budgeting]] are two of the most common techniques of the budgeting process. In this budgeting process, everything starts with estimating the [[cost]] that is implemented in the organization for higher level tasks<ref>Bolojan F. (2011), p.160, 162</ref>. Top down budgeting can easily help understand boundaries and support of aggregate fiscal policy issues among decision makers. It makes it easier to set priorities in the [[government]] administration sector and of ensuring budget allocations compatible with those priorities<ref>Ljungman G. (2009) p.13</ref>.

==Advantages of top down budgeting==
There are a lot of different advantages and disadvantages of top down budgeting<ref>Bolojan F. (2011), p.163, 164</ref><ref>Emery R.  (2007) p.69</ref>:

'''Advantages''':
* '''Cost control''': At the beginning of budgeting, the [[money]] is allocated to tasks from the highest level and only later to tasks from the lower level. Acting in this order helps [[project]] managers and [[company]] managers to manage costs executives and thanks to it limited resources are better allocated.
* '''Development for [[management]]''': Top down budgeting is a process that gives great opportunities to the management. It is the top managers who set the rules for developing the budget
* '''Internal approach'''Strengthens and promotes internal relocation and avoids preliminary budget proposals from the ministries.

'''Disadvantages''':
* '''[[Need]] for expertise''': Experience is obligatory. Members of the management team and managers must be properly trained and have specialized [[knowledge]] of top down budgeting. Without experience, they would not be able to allocate money properly. This type of budgeting requires a lot of knowledge from managers.
* '''Process difficulties''': Many process problems may occur in this process, for example, the manager's failure to provide the proper level of funding for lower level tasks may result in the placement of an [[employee]] from this level of the organization is wrong because he will not have the means to perform his tasks.

==Top down budgeting cases==
There are two known and commonly used cases of top down budgeting<ref>Ljungman G. (2009) p. 12,13</ref>:
# It is used as an instrument to improve budget stability. This is a very good option because it is related to prejudice in making public decisions related to excessive deficits.
# It can improve budget stability by warning about the preferences of parliamentarians and ministers. Top down budgeting can help you understand borders and provide support of aggregate fiscal policy issues among decision makers.

==References==
* Bolojan F. (2011) [http://www.codrm.eu/conferences/2011/26_Bolojan.pdf ''Bottom-up/top-down budgeting''] Joint [[Logistics]] Command, Bucharest, Romania
* Emery R. (2007) [http://www.oecd.org/governance/budgeting/41823650.pdf#page=93 ''OECD Journal on Budgeting''] Volume 7, No. 4, OECD, United States
* Ljungman G. (2009) [https://books.google.pl/books?hl=pl&lr=&id=CFms3R7AGK4C&oi=fnd&pg=PT5&dq=%22Top+down+budgeting%22&ots=MxdN8X_vtX&sig=WyMaQInxWJiaDvPu_s2pZy-yhi0&redir_esc=y#v=onepage&q=%22Top%20down%20budgeting%22&f=false ''Top-Down Budgeting: An Instrument to Strengthen Budget Management''] [[International Monetary Fund]], USA
* Raudla R. (2014) [https://www.econstor.eu/bitstream/10419/157650/1/777172895.pdf ''Budgeting during austerity: Approaches, instruments and practices''] Budgetary Research Review Vol. 5 (1), Econstor, Tallinn University of [[Technology]], Estonia

==Footnotes==
<references/>

[[Category:Financial management]]
{{a|Aleksandra Majcher}}