Commons Methods Used to Prepare Money Budgeting Spreadsheets
There are 2 strategies commonly used to arrange the Money Budgeting Spreadsheets. These two strategies are "Bottom Up Budget' and "Prime Down Budget". Each strategies share the same objective to produce an correct Money Budgeting Spreadsheets.
Bottom Up Budget
Within the "Bottom Up budget" technique, the corporate let the all the managers of departments (HODs) to return up with their own budgeting spreadsheet justified by formulae, researches and plans. The HODs can do the primary review of the spreadsheets. Once they need finalized, the spreadsheets will be submitted to the Money Designing Unit for additional review. During this review process, the budget figures can be fine tuned. Throughout this review stage, it's quite common for the spreadsheets to flow in and out between the respective Departments and Money Planning Unit.
Once the Financial Planning Unit finalized the spreadsheets, it will be submitted to the Board of Directors (BODs) for final review and final approval. During the review by BODs, there might still be spreadsheets flow to and backward to the BODs. However the frequency of those would be very a lot of reduced at this stage. Once the BODs finalized the budget figures, the monetary budgeting spreadsheets can be final and prepared to be implemented by the respective departments.
Prime Down Budget
Within the "High Down budget', the Money Planning Unit uses the historical reports such as Balance Sheets and Profit and Loss Statements, to comes up with preliminary budgeting spreadsheets. The Financial Planning Unit will hold a gathering with all the BODs and HODs and presents the preliminary spreadsheets to all. During this meeting, the spreadsheets can be discussed and fine tuned to the satisfaction of the meeting. Once the meeting finalized, the spreadsheets will be circulated to the respective departments for implementation and to draw up plans to achieve budget figures.
Professional and Con
Each the on top of ways have their pro and con. The "Bottom Up Budget" is slow however the budgeting spreadsheets are additional accurate as all levels of the company employees, from bottom to high, are involved within the preparation of the budget numbers.
The "Prime Down Budget" is quicker but the budgeting spreadsheets are less accurate because the budget numbers are set at prime level meeting and the participation of lower level workers are limited. The impact of this less accuracy will be minimized by applying some financial analytical ratios and formulae to fine tune the ultimate budgeting spreadsheets.
The review process might be differ from organization to organization. However the main objective of the review method, that's, to produce Financial Budgeting Spreadsheets as correct as attainable, is the same.
I personally prefer the "Prime down Budget" methodology and fine tune it with varied analytical rations and formulae.
Author Resource:-
Bob has been writing articles online for nearly 2 years now. Not only does this author specialize in finance,you can also check out his latest website about:
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