Healthcare Finance Assignment Example | Topics and Well Written Essays - 250 words - 1

Healthcare Finance - Assignment Example This saves time and resources dedicated to budgeting (Shim, Siegel & Shim, 2012). Top-down approach also minimizes unnecessary spending by the various departments and helps streamline an organization’s accounting processes. This further helps an organization to stay financially firm while avoiding cost overruns. This is unlike the bottom up approach where departments make their own budgets and pass them to the upper executives. The major risk that comes with this approach is the possibility of experiencing cost overruns, which can be financially damaging (Shim, Siegel & Shim, 2012). By leaving the responsibility of budgeting to the upper management, chances of costs overruns are greatly reduced. A top-down approach can also be used to help departments know what is expected of them. Each department is allocated a budget according to the expectations of the organization on that department. This is ideal in a situation where an organization wants to reduce on its