## Creating and Managing a BottomUp Budget

A bottom-up budget, on the other hand, assumes no top starting figure (though I can guarantee you there will be one). Instead, you appropriate your funds to cover each tasks requirements, whether capital items, expenses, or services. You use cost-estimating techniques to figure out how much each task you must perform will require. The top-down and bottom-up methods are a bit similar, but with bottom-up you have more leeway because you're not (yet) dealing with a fixed budget figure.

Figure 9.2 shows what a simple bottom-up budget might look like. Bottom-up uses the actual expenses you've already incurred along with the scheduled (or projected) expenses.

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Figure 9.2: An elementary bottom-up budget spreadsheet

Figure 9.2: An elementary bottom-up budget spreadsheet

You can see that I've formatted the sheet to show the conventional columns you might track. Note also that without the top-down budgetary constraint, the same project looks very different, at least in terms of cost. In this budget, you have the ability to assess costs a bit more liberally.

 Table 9.2: Differences between Top-Down and Bottom-Up Budgets Feature Top-Down Bottom-Up Unknown dollar amount at budget development time No Yes Requires assuming that some resources will be available Yes No Requires cost-estimating Yes (but might involve more "guesstimati ng" than estimating) Yes Must work within dollar figure given Yes No Might have to pare down tasks and activities to meet the budget Yes, but before Yes, but after the
 Table 9.2: Differences between Top-Down and Bottom-Up Budgets Feature Top-Down Bottom-Up developme nt of the budget project budget has been approved