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While there are those who would be of the opinion that bottom-up budgeting is the better option, due to numerous reasons, such as employee empowerment, responsibility and accountability for achieving own goals set, more detailed budgets, it does come with it's own set of risks.
Firstly it could be time consuming. With the increased pressure of being held accountable for their own budgets, front line tends to take longer to submit first drafts. Then the back and fourth that follows after first review could cost time and money, as the focus of the employees shift from the day to day running of the organisation to budgets.
Departments tend to look after their own interests. This could lead to inflated or understated figures to make the budget look more attractive to senior management, as oppose to realistic attainable budgets. The opposite could also occur, were modest budgets are submitted to alleviate pressure from top management to perform.
Bottom-up budgets may lack vision. Front line's main focus will be to generate profit but not necessarily steer the organisation in the specific direction required to meet long term goals. Top-down approach may also lead to better monitoring and control of budgets set compared to bottom-up, which usually goes hand in hand with autonomy.
