{"id":707,"date":"2024-05-31T13:59:18","date_gmt":"2024-05-31T13:59:18","guid":{"rendered":"https:\/\/bellmarketingsolutions.com\/index.php\/2024\/05\/31\/how-a-bottom-up-budget-can-transform-your-company-from-bottom-to-top\/"},"modified":"2024-05-31T13:59:18","modified_gmt":"2024-05-31T13:59:18","slug":"how-a-bottom-up-budget-can-transform-your-company-from-bottom-to-top","status":"publish","type":"post","link":"https:\/\/bellmarketingsolutions.com\/index.php\/2024\/05\/31\/how-a-bottom-up-budget-can-transform-your-company-from-bottom-to-top\/","title":{"rendered":"How a Bottom-Up Budget Can Transform Your Company From Bottom to Top"},"content":{"rendered":"<div class=\"hs-featured-image-wrapper\">\n <a href=\"https:\/\/blog.hubspot.com\/marketing\/bottom-up-budget\" title=\"\" class=\"hs-featured-image-link\"> <img decoding=\"async\" src=\"https:\/\/blog.hubspot.com\/hubfs\/bottomupbudget.webp\" alt=\"woman makes a bottom up budget on a laptop\" class=\"hs-featured-image\" style=\"width:auto !important;max-width:50%;float:left;margin:0 15px 15px 0\"> <\/a>\n<\/div>\n<p>The first time I managed a marketing budget, I was handed a dollar figure and asked to accomplish X, Y, and Z with it. The following year, I was asked to do <em>more<\/em> with a slightly smaller budget. Sound familiar?<\/p>\n<p>The first time I managed a marketing budget, I was handed a dollar figure and asked to accomplish X, Y, and Z with it. The following year, I was asked to do <em>more<\/em> with a slightly smaller budget. Sound familiar?<\/p>\n<p>While this top-down approach is common, it isn\u2019t the only way to budget. The opposite approach is a bottom-up budget, where each department and team proposes a budget according to their needs and goals.<\/p>\n<p>This is common in large organizations and <a href=\"https:\/\/www.hubspot.com\/startups\/resources\/startup-financial-projections-template\/\">startups<\/a> alike.<\/p>\n<p><a class=\"cta_button\" href=\"https:\/\/www.hubspot.com\/cs\/ci\/?pg=3e2abb94-93d9-4cf5-bd8e-6a96ecc14270&amp;pid=53&amp;ecid=&amp;hseid=&amp;hsic=\"><img decoding=\"async\" class=\"hs-cta-img \" style=\"height: auto !important;width: auto !important;max-width: 100% !important;border-width: 0px\" alt=\"Click here to download 8 free marketing budget templates.\" height=\"59\" width=\"520\" src=\"https:\/\/no-cache.hubspot.com\/cta\/default\/53\/3e2abb94-93d9-4cf5-bd8e-6a96ecc14270.png\"><\/a><\/p>\n<p>Had I played a more active role in creating that first marketing budget, our strategic approach and performance \u2014 not to mention my engagement level \u2014 likely would have looked different.<\/p>\n<p>Let\u2019s explore the benefits of bottom-up budgeting and how to implement it at your company.<\/p>\n<p><strong>Table of Contents <\/strong><\/p>\n<ul>\n<li><a href=\"#bottom-up-budget\">What is a bottom-up budget?<\/a><\/li>\n<li><a href=\"#example\">Example: Building My Own Bottom-Up Budget<\/a><\/li>\n<li><a href=\"#get-started\">Get Started: How to Create a Bottom-Up Budget in 5 Steps<\/a><\/li>\n<li><a href=\"#best-practices\">Bottom-Up Budget Best Practices<\/a><\/li>\n<li><a href=\"#when-to-use\">When to Use a Bottom-Up Budget<\/a><\/li>\n<\/ul>\n<p><a><\/a> <\/p>\n<h2>What is a bottom-up budget?<\/h2>\n<p>A bottom-up budget is a budgeting methodology where individual departments propose their own budgets to be consolidated by the centralized finance team.<\/p>\n<p>Unlike top-down budgeting which takes a prescriptive approach to assigning budget amounts to teams, bottom-up budgeting is a collaborative method.<\/p>\n<h3>Top-Down vs. Bottom-Up Budgets<\/h3>\n<p><img decoding=\"async\" alt=\"Top down vs bottom up budgets example\" src=\"https:\/\/lh7-us.googleusercontent.com\/5tFWJt4I0hEWkllyv6FiEhOb9NGkF72BD0UOWfkE9CvcSvch-ISwQbxNoyUyvqTd4BMTt8wh0Q0qvMn9ZusYvMQYklK1nY21x8FUzWddRhg9NfHBVD_orGAo8jfdMQh_Bcp7yoALqsamwtNqdPgHjCk\" style=\"margin-left: auto;margin-right: auto;width: 650px;height: auto;max-width: 100%\" title=\"\"><\/p>\n<p>For bottom-up budgeting to work, companies need exemplary guidelines, workflows, and communication to navigate the budgeting process.<\/p>\n<p>While this methodology has many advantages, it also has some drawbacks. Each company should carefully weigh the pros and cons and follow best practices.<\/p>\n<h3>Pros of Using a Bottom-Up Budget<\/h3>\n<p>Bottom-up budgeting gives teams and employees more autonomy and flexibility and can be more accurate. But like any collective decision-making, it\u2019s more complicated to pull off.<\/p>\n<p>Here are four advantages of the bottom-up budgeting approach.<\/p>\n<h4>1. Bottom-up budgets improve accuracy.<\/h4>\n<p>Finance leaders don\u2019t have an in-depth knowledge of the day-to-day functions, needs, and constraints of each unit. The teams that carry out this work do.<\/p>\n<p>When the teams doing the work create the budget, it\u2019s more likely to be detailed and accurate because of the team\u2019s intimate knowledge of the operational realities.<\/p>\n<h4>2. Bottom-up budgets increase team autonomy and engagement.<\/h4>\n<p>Inviting teams to participate in the budgeting process gives them more autonomy and engagement with their work. Not only can this help engage and retain employees, but it positions the company for better performance.<\/p>\n<p><em>\u201cWhen finance teams give budget owners more ownership and autonomy to create their budget, there is better partnership that can increase accountability to comply with it and improve overall financial performance,\u201d<\/em> shares <a href=\"https:\/\/www.linkedin.com\/in\/balakini\">Bala Kini<\/a>, senior director and financial consultant at ZRG Partners.<\/p>\n<p><em>\u201cThis fosters a culture of empowerment and collaboration between all levels of employees.\u201d<\/em><\/p>\n<h4>3. Bottom-up budgets allow for more agility.<\/h4>\n<p>Since teams are experts in their functional areas, they can anticipate how priorities and costs may change from year to year. For instance, non-marketers may be unaware of how the cost of paid advertising has risen in recent years.<\/p>\n<p>Bottom-up budgeting shines as it allows quick adjustments and adaptations to changing market conditions or internal priorities.<\/p>\n<h4>4. Bottom-up budgets increase transparency among departments.<\/h4>\n<p>Bottom-up budgeting is a collective process, and companies using this method benefit from greater transparency. This contributes to greater trust, accountability, and collaboration.<\/p>\n<h3>Cons of Using a Bottom-Up Budget<\/h3>\n<p>Despite the benefits, bottom-up budgeting brings some challenges along with it.<\/p>\n<h4>1. Bottom-up budgets can lead to misalignment between the company and departments.<\/h4>\n<p>If departmental goals and strategies don\u2019t align with overarching company goals, there\u2019s a risk of strategic misalignment.<\/p>\n<p><em>\u201cI\u2019ve seen cases where lower levels of management are blindsided by their operational needs and deliverables and lose sight of the company\u2019s long-term strategic goals,\u201d <\/em>says Kini.<\/p>\n<p><strong>How to counter this<\/strong>: Invest in internal development to connect employees and teams to your company values. Include champions from each unit in creating your overarching strategy and vision.<\/p>\n<h4>2. The process can be cumbersome and time-consuming.<\/h4>\n<p>The process of bottom-up budgeting is more complex and time-consuming. 73% of organizations say they spend too much time on manual budget processes such as validation and data entry, according to <a href=\"https:\/\/www.venasolutions.com\/resources\/state-of-strategic-finance-2022\">Vena<\/a>.<\/p>\n<p>Bottom-up budgeting involves initial communication, <a href=\"https:\/\/blog.hubspot.com\/sales\/budgeting-vs-forecasting\">forecasting costs and revenue<\/a>, consolidating an overall budget, and working through revisions and errors. This can make the process slower and inefficient and create a higher indirect cost from employee time spent on budgeting.<\/p>\n<p><em>\u201cBuilding the budget from the ground up can also be daunting for budget contributors,\u201d <\/em>explains <a href=\"https:\/\/www.linkedin.com\/in\/melissahowatson\/\">Melissa Howatson<\/a>, CFO at Vena and host of <a href=\"https:\/\/thecfoshowpodcast.com\/\">The CFO Show<\/a> podcast.<\/p>\n<p><em>\u201cIn many cases, managers would actually prefer to know what the starting guardrails are and go from there. This would also help with reducing the likelihood of budget owners having to start the process over if their proposed budget doesn\u2019t fit with the company\u2019s overall objectives.\u201d<\/em><\/p>\n<p><strong>How to counter this<\/strong>: Create a well-defined budget process and oversight (see our detailed implementation tips below).<\/p>\n<h4>3. Bottom-up budgets have a greater risk of distorted budgets.<\/h4>\n<p>With bottom-up budgets, there\u2019s a risk that each unit will ask for too much money and that the company will overspend.<\/p>\n<p><em>\u201cThere is a high possibility that department leads approach this as a \u2018blank check\u2019 opportunity and inflate their expense budget and underestimate revenues (overestimate losses) so that their performance always appears favorable,\u201d<\/em> cautions Kini.<\/p>\n<p><strong>How to counter this<\/strong>: Take a realistic look at your projected revenue for the year. In the consolidation process, ask departments to make cuts if necessary.<\/p>\n<h3>Anatomy of a Bottom-Up Budget<\/h3>\n<p>So, what does a bottom-up budget actually look like? A bottom-up budget is more than just numbers on a spreadsheet. Here are all the parts that go into a bottom-up budget.<\/p>\n<h4>Revenue Projections<\/h4>\n<p>In this section, you\u2019ll add estimates of the income or revenue expected from sales, services, investments, grants, or other sources.<\/p>\n<p><a href=\"https:\/\/blog.hubspot.com\/sales\/financial-forecasting\">Revenue projections<\/a> serve as the foundation for budgeting expenses. If your unit isn\u2019t a revenue-generating one, skip this step.<\/p>\n<h4>Expense Categories<\/h4>\n<p>Start by breaking down your projected expenses into categories like:<\/p>\n<ul>\n<li>Personnel (salaries, benefits).<\/li>\n<li>Operating expenses (rent, utilities, office supplies).<\/li>\n<li>Marketing expenses (agencies, ad campaigns, production).<\/li>\n<li>Equipment or capital expenditures.<\/li>\n<li>Research and development.<\/li>\n<\/ul>\n<h4>Expense Estimates<\/h4>\n<p>Now, we come to the dollar amounts. Estimate how much you\u2019ll spend on specific activities, projects, or initiatives during the budget period.<\/p>\n<p>Consider direct costs (e.g., materials, labor) as well as indirect costs (e.g., overhead, administrative expenses).<\/p>\n<h4>Budget Assumptions<\/h4>\n<p>List which assumptions and factors you considered during budget planning, such as revenue and growth projections, inflation rates, market trends, or regulatory changes.<\/p>\n<h4>Budget Justifications<\/h4>\n<p>Give justifications for each budget line item, detailing the rationale behind it. Link budget items to strategic objectives and performance metrics and account for any increases from the previous budgeting period.<\/p>\n<h4>Scenario Planning<\/h4>\n<p>In bottom-up budgeting, it\u2019s a good idea to propose more than one budget to management.<\/p>\n<p>This gives teams the agility to adapt, but retain ownership if they don\u2019t receive the budget amount they requested, or unforeseen circumstances change budget assumptions or financial performance during the year.<\/p>\n<p>Scenario planning outlines steps to manage risks, reallocate resources, or adjust budget priorities as needed. Consider the example below from <a href=\"https:\/\/u-niqueaccounting.com\/business-budget-template-in-excel\/\">U-nique Accounting Services<\/a>, which gives the option for three different budget scenarios.<\/p>\n<p><img decoding=\"async\" alt=\"Bottom-up budget multiple scenarios\" src=\"https:\/\/lh7-us.googleusercontent.com\/i1uMh0AWFIAb-xkBQvUL5JV-zal_7PkcsksOsX6JMKRpd2-f-zWq6GFW8LiokWD6zRAo-CWx4Z37rQDI4lhsUUsH7LRfuQsR1wsUV18zBFyLmyCOIB-uDFu5XhXabf6_hXXODzDV9jr4DtCLbr3AgP0\" style=\"margin-left: auto;margin-right: auto;width: 650px;height: auto;max-width: 100%\" title=\"\"><\/p>\n<p style=\"text-align: center;font-size: 12px\"><a href=\"https:\/\/u-niqueaccounting.com\/business-budget-template-in-excel\/\"><em>Image Source<\/em><\/a><\/p>\n<p><a><\/a> <\/p>\n<h2>Example: Building My Own Bottom-Up Budget<\/h2>\n<p>Ready to see this in action? Follow along as I create a product marketing budget proposal. For this project, I used a modified version of the <a href=\"https:\/\/blog.hubspot.com\/marketing\/how-to-manage-marketing-budget-free-budget-templates\">HubSpot marketing budget templates<\/a>.<\/p>\n<p><a href=\"https:\/\/offers.hubspot.com\/marketing-budget-templates\"><strong>Download the Marketing Budget Templates<\/strong><\/a><\/p>\n<p>First, I started by breaking my product marketing costs into expense categories.<\/p>\n<p>For these, I chose product\/market fit, product testing, product releases, and content. I listed out each anticipated cost, such as $10,000 for user testing sessions under product testing.<\/p>\n<p>In a more detailed version, I would estimate the cost for each category by month, quarter, and year.<\/p>\n<p><img decoding=\"async\" alt=\"Product marketing budget example, bottom-up budget proposal example\" src=\"https:\/\/lh7-us.googleusercontent.com\/pkPn2vqUGsMOPnljDOSTmTt8pAmdAQK83oD3LNTtlCqpPt05VHZXwXxhRUOKLf3pPTmmof6ICkJCugjZHBis1AD4bIIhL_vwAt63bbbnBjkK2hC7rBS3qQaOxs3M1jCpFsCmmGogwsxALXBzj0yjgpE\" style=\"margin-left: auto;margin-right: auto;width: 650px;height: auto;max-width: 100%\" title=\"\"><\/p>\n<p>You\u2019ll notice that I have two scenarios here. Scenario 1, presumably the ideal one, has a larger budget of $200,000, while Scenario 2 has a smaller overall amount of $150,000 to show how I would adjust for a smaller budget allotment.<\/p>\n<p>Now, to give my finance department and executive leadership some context, I\u2019ve added three additional columns:<\/p>\n<ul>\n<li><strong>Cost explanation<\/strong> breaking the line item down into smaller costs and needs.<\/li>\n<li><strong>Objectives<\/strong> showing the goal of each item or initiative it supports.<\/li>\n<li><strong>Assumptions<\/strong> I made to reach my cost projection.<\/li>\n<\/ul>\n<p>Below, you\u2019ll see how this looks for the content category.<\/p>\n<p><img decoding=\"async\" alt=\"Product marketing budget example, bottom-up budget proposal example\" src=\"https:\/\/lh7-us.googleusercontent.com\/kUo-vjLP1iWhmoeIoMr3BDzhdL3ncscPY7wWtozx2-rswkIw8TogYht4vp2lGEW1jn4yoXqWQgTTI5iYpWw2_dLfN9IHLNPta46ZGQWrBP_fqiPypgyS8vcaE3b1tzxCaTosXJ9LeRyBcKSJKeMicms\" style=\"margin-left: auto;margin-right: auto;width: 650px;height: auto;max-width: 100%\" title=\"\"><\/p>\n<p>Finally, here\u2019s the entire budget proposal put together. The graph at the bottom shows how my budget breaks down by category.<\/p>\n<p>The beauty of this template is that I can use it for budget tracking throughout the year, using the actual column to track expenses.<\/p>\n<p>At the end of the year, I can use the actual expense data in a <a href=\"https:\/\/blog.hubspot.com\/sales\/budget-analysis\">budget analysis<\/a> to project a more accurate budget for the following year.<\/p>\n<p><img decoding=\"async\" alt=\"Product marketing budget example, bottom-up budget proposal example\" src=\"https:\/\/lh7-us.googleusercontent.com\/_psVrHaJv3jD5nmbaPAaqDQNH1ndEF7CEP_NTA1bgCFv1x1ejxCGTIRkVCuaxlCn3X_cWxILYqyqGbB59EWJI1uXSEKSKZT7V-NFvN-FvtGadCZS7ClhuuTll5vMjf54pFNdCQpoCOlD8fXPwRWL-fk\" style=\"margin-left: auto;margin-right: auto;width: 650px;height: auto;max-width: 100%\" title=\"\"><\/p>\n<p>Once I submit my budget proposal to my finance department, the consolidated budget will look a lot different. It may look something like <a href=\"https:\/\/docs.google.com\/spreadsheets\/d\/1FKg6C01Pfycf_Zq8yvNztAZmNR8QwwdkGd1mIxxLrp0\/edit#gid=1000915004\">this annual budget template<\/a> from Google Sheets.<\/p>\n<p><img decoding=\"async\" alt=\"Bottom-Up Budget Examples\" src=\"https:\/\/lh7-us.googleusercontent.com\/omyaINOhiCnoxTUjejq-RusgONSzDowR_xbcAY8IZnBmH_Xiiu436N0csZQw3uzgAI1tTnNz27UKy5khiPxZWYHemgnGyk9l0Evyg4I5ONcvWqFAB_oWu4cX6td1iJxB8ypYW2-X9UdjEVCesSZhbvU\" style=\"margin-left: auto;margin-right: auto;width: 650px;height: auto;max-width: 100%\" title=\"\"><\/p>\n<p>Here, you can see my product marketing budget in context with expenses from all across the company: legal, insurance, taxes, and more. That way, company leadership can consider and balance all needs and priorities.<\/p>\n<p><a><\/a> <\/p>\n<h2>Get Started: How to Create a Bottom-Up Budget in Five Steps<\/h2>\n<p>Creating a bottom-up budget is a big undertaking and takes collaboration from every part of a company! Here\u2019s how to approach creating a bottom-up budget.<\/p>\n<h3>1. Define budgeting roles.<\/h3>\n<p>First, determine all parties with a role to play and how each will participate. Here are the players who typically contribute to the bottom-up budgeting approach:<\/p>\n<ul>\n<li><strong>Executive leadership<\/strong>. Leadership sets the overall strategy, sets strategic goals, and reviews and approves the final budgets.<\/li>\n<li><strong>Finance<\/strong>. The finance team is the main player responsible for budgeting. They should develop standardized procedures, train and support department heads, reviewing submissions for accuracy, consistency, and strategic alignment.<\/li>\n<li><strong>Department heads<\/strong>. Department leads are accountable for the accuracy of their budgets and for ensuring that the budget aligns with their goals. They should work closely with field-level staff and operational leads to identify the best opportunities for resource efficiencies.<\/li>\n<li><strong>Go-to-market team<\/strong>. Your GTM team can provide key assumptions for the year like new bookings, product launches, and addressable market to inform your budget needs.<\/li>\n<li><strong>Human Resources<\/strong>. Human resources can contribute to estimates of job salaries, benefits, and other employment costs like retention initiatives.<\/li>\n<li><strong>IT<\/strong>. Of finance leaders, <a href=\"https:\/\/www.venasolutions.com\/resources\/state-of-strategic-finance-2022#benchmark-report\">49% rely heavily on IT<\/a> to manage their existing systems. IT departments can provide the right tools and technology to house and analyze budget data, manage approvals, and maintain cybersecurity of financial data.<\/li>\n<\/ul>\n<p>Make sure that each team understands its roles and responsibilities for a successful partnership between departments.<\/p>\n<h3>2. Ask departments to submit a budget proposal.<\/h3>\n<p>Next, ask departments to submit their budgets to you. Give a clear scope, guidelines, and timelines for departments, as well as a clear process and appropriate tools to support teams.<\/p>\n<p><em>\u201cThe finance team needs to have a strong process ethic to develop, test, and distribute templates with clear guidelines and communication about timelines, performance metrics, and ways to clarify questions that may arise,\u201d <\/em>says Kini.<\/p>\n<h3>3. Consolidate departmental budgets.<\/h3>\n<p>Next, combine all the individual budget proposals into one <a href=\"https:\/\/blog.hubspot.com\/sales\/master-budget\">master budget<\/a>.<\/p>\n<p>Perform a quality review to check for errors as you input everything into your larger budget.<\/p>\n<p>Together with your revenue projections, you will have a full financial picture of the next budgeting period.<\/p>\n<p>Depending on the complexity of your organization, you may have an initial submission and preliminary review before sending the budget on to leadership.<\/p>\n<h3>4. Review, adjust, and finalize your budget.<\/h3>\n<p>Once you have a full financial picture validated by the finance team, leadership can review the master budget.<\/p>\n<p>At this stage, they can compare this year\u2019s budget against last year, ask questions of department heads, and ask units to make changes if needed. Once all iterations are complete and approved, you have a bottom-up budget.<\/p>\n<h3>5. Track budget metrics.<\/h3>\n<p>Once your budget is finalized, the work isn\u2019t done. Throughout the budgeting period, track metrics monthly, track performance, and report variations.<\/p>\n<p>Budgeting metrics vary by industry but may include gross profit margin, operating cash flow, or working capital.<\/p>\n<p>Use budget control methods like <a href=\"https:\/\/blog.hubspot.com\/sales\/budget-variance\">budget variance <\/a>to determine any deviations from or corrections needed to a budget. Consider the variance report below from Vena as an example of how to track budgeted versus actual expenses.<\/p>\n<p><img decoding=\"async\" alt=\"Bottom-up budget metrics, variance report\" src=\"https:\/\/lh7-us.googleusercontent.com\/IEXzUMjJAOao-IKgfJ1as57J4oBPsF-JRWivSJtME4O9i6kVzabHuv5n4UxWXwItHQjbMJ4TGglYySoDYy4qxyOVR9eAmye7j_a8bQpo9kCxhe04b1PZGVOz85UANXbFPFMqB4PqKra2CjZ7b0iMKA4\" style=\"margin-left: auto;margin-right: auto;width: 650px;height: auto;max-width: 100%\" title=\"\"><\/p>\n<p style=\"text-align: center;font-size: 12px\"><a href=\"https:\/\/www.venasolutions.com\/templates\/plan-budget-forecast\/bottom-up-planning\"><em>Image Source<\/em><\/a><\/p>\n<p><a><\/a> <\/p>\n<h2>Bottom-Up Budget Best Practices<\/h2>\n<p>To make your budgeting process smooth and successful, follow this advice from mature financial organizations.<\/p>\n<h3>Map out budget timelines and guidelines.<\/h3>\n<p>To manage the complex process, communicate guidelines and timelines for every step of the process. You may want to use a project management software or other tracking tool to create calendars and keep everyone on track.<\/p>\n<p>Kini advises, <em>\u201cWhen setting timelines, work backward from target dates and never lose sight of the fact that teams have their operational responsibilities and constraints. Teams need to understand that this is not a \u2018once and done\u2019 but an iterative process.\u201d<\/em><\/p>\n<p>You should also time your budget process with other key initiatives, like strategic planning.<\/p>\n<p><em>\u201cBudgeting should be one workstream that is part of a comprehensive annual operating plan,\u201d <\/em>says Howatson. <em>\u201cThe budget creation process should happen with context into other key business plans to make sure they are ultimately aligned.\u201d<\/em><\/p>\n<h3>Beware of misallocation.<\/h3>\n<p>One danger of bottom-up budgeting is that department leaders aren\u2019t all playing by the same rules.<\/p>\n<p>Stronger voices may build in a buffer and end up with more budget than they need, whereas leaders who push for efficiency can end up disadvantaged.<\/p>\n<p><em>\u201cTo solve this, it\u2019s important for finance and HR to be effective business partners throughout the whole budget creation process and ensure consistency across how managers are approaching their budget inputs,\u201d<\/em> advises Howatson.<\/p>\n<p><em>&#8220;Providing budget contributors with guardrails ensures the budget process isn\u2019t entirely open-ended, helping avoid this issue further.\u201d<\/em><\/p>\n<h3>Support your teams through the budgeting process.<\/h3>\n<p>For bottom-up budgeting to work, it must be truly collaborative.<\/p>\n<p>During budget season, teams take on budgeting responsibilities in addition to their everyday job duties. This combination can be stressful already, and a lack of support from finance partners can add to the stress and lower morale.<\/p>\n<p>Open a support channel and communicate regularly about guidelines and deadlines. Make it user-friendly to account for non-technical budget contributors.<\/p>\n<p>During and after the budget cycle, collect feedback to identify areas for improvement.<\/p>\n<p>Ultimately, this helps create the best environment for successful bottom-up budgeting.<\/p>\n<p><em>\u201cA bottom-up approach allows you to get buy-in from across the business, and because individual managers effectively \u2018own\u2019 the budget, they won\u2019t feel like it&#8217;s being imposed onto them,\u201d <\/em>says Howatson.<\/p>\n<p><a><\/a> <\/p>\n<h2>When to Use a Bottom-Up Budget<\/h2>\n<p>Ultimately, the choice between bottom-up and top-down budgeting depends on your specific needs and culture.<\/p>\n<p>Bottom-up budgeting can be advantageous in fast-changing industries or startups where field-level insights are critical, as well as in highly collaborative, cross-disciplinary companies.<\/p>\n<p>To reap its benefits, your company needs strong financial discipline.<\/p>\n<p>If a business is small, operates in a very predictable industry, or doesn\u2019t have a mature finance department, a top-down approach may be more suitable.<\/p>\n<p>Carefully consider the pros and cons before committing to one approach over the other. Whichever you choose, commit to a clear process and stay open to employee feedback.<\/p>\n<p><a class=\"cta_button\" href=\"https:\/\/www.hubspot.com\/cs\/ci\/?pg=fec839c8-058f-4d11-8943-c7e0c554fa27&amp;pid=53&amp;ecid=&amp;hseid=&amp;hsic=\"><img fetchpriority=\"high\" decoding=\"async\" class=\"hs-cta-img \" style=\"height: auto !important;width: auto !important;max-width: 100% !important;border-width: 0px\" alt=\"New Call-to-action\" height=\"226\" width=\"646\" src=\"https:\/\/no-cache.hubspot.com\/cta\/default\/53\/fec839c8-058f-4d11-8943-c7e0c554fa27.png\"><\/a><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/track.hubspot.com\/__ptq.gif?a=53&amp;k=14&amp;r=https%3A%2F%2Fblog.hubspot.com%2Fmarketing%2Fbottom-up-budget&amp;bu=https%253A%252F%252Fblog.hubspot.com%252Fmarketing&amp;bvt=rss\" alt=\"\" width=\"1\" height=\"1\" style=\"min-height:1px!important;width:1px!important;border-width:0!important;margin-top:0!important;margin-bottom:0!important;margin-right:0!important;margin-left:0!important;padding-top:0!important;padding-bottom:0!important;padding-right:0!important;padding-left:0!important\"><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The first time I managed a marketing budget, I was handed a dollar figure and asked to accomplish X, Y, and Z with it. The following year, I was asked to do more with a slightly smaller budget. Sound familiar? 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