Planning budgets from the top down
Top-down planning is useful if a plan has predictable expenses from year to year.
About this task
For example, every year you create a plan that is called New Product Launch that includes trade shows. You can create programs such as Trade show 1 and Trade show 2, and assign funds to each program.
The Trade show 1 program might include a project that is called New Customer Acquisitions. You can allocate funds from Trade show 1 to make New Customer Acquisitions successful. Since the flow of funds is from the plan down to associated programs and projects, top-down planning is highly useful and easy.
You manage budgeting from plans down to programs and projects in the following way.
Procedure
- Allocate funds to the plan budget.
- Allocate funds from the plan budget its child programs.
- Allocate funds from the programs to it child projects, which are grandchildren of the plan.
- Allocate funds from the projects to it child subprojects, which are great-grandchildren of the plan.