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Which budgeting approach appeals to you and why?

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kc76384 | Valedictorian

Posted June 24, 2013 at 3:01 PM via web

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Which budgeting approach appeals to you and why?

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted June 24, 2013 at 3:45 PM (Answer #1)

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First, we must realize that there would be different circumstances in which each of the various approaches to budgeting would be superior.  Thus, there is no “one size fits all” approach that is best in all situations.  That said, I would prefer a zero-based budgeting process that is more bottom-up than top-down.

In a zero-based budgeting process, we do not look at what our budgets were last year.  We do not start with the assumption that we will allocate our money in a way that is similar to what was done last year.  Instead, we start from zero and build a budget from scratch.  We ask each part of our organization to propose how much money it will need and we require each part of our organization to justify that number. 

This is, in my view, the ideal way to do things.  This is because this process allows us to start fresh each year.  If we have made mistakes in our budgeting in the past, we do not have to continue to make the same mistakes due to inertia.  Instead, we have a chance to start afresh every year and to really analyze what is best for our organization each year.

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