Project Management

PROJECT MANAGEMENT 3(1+2)

Lesson 14 : Budgeting

Process of budgeting

The budgeting process begins when top management sets the strategies and goals for the organization. Usually lower level managers will then devise budgets for their sub-units within these guidelines set by top management. The budgets will then be reviewed by the superiors of these managers; the superiors will eventually integrate lower level budgets into their own budget and send it up the chain of command for review. This process continues until the organization’s overall budget has been approved by the board of directors. A budget department or budget committee may assist line managers in budget preparation and review.
The six steps in the budgeting process are:

1. Setting objectives
2. Analyzing available resources
3. Negotiating to estimate budget components
4. Coordinating and reviewing components
5. Obtaining final approval
6. Distributing the approved budget