Page 315 - SBL Integrated Workbook STUDENT 2018
P. 315
Financial decision making
Budgeting
7.1 The principal budget factor
A factor which places a limit on the activities of an organisation. For most
companies this will be the level of sales that they can generate.
Budget preparation should always start with a budget for the principal budgetary
factor.
7.2 Top down vs bottom up
Top Down Bottom up
Senior Senior
management management
Middle-line Middle-line
managers managers
Operational Operational
managers managers
Quicker Better decisions
Better for goal congruence Motivates
Better co-ordination Budgets are more
acceptable
Avoid budgetary slack
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