--- title: Your 2019 Budget – Top Down or  Bottom Up? description: In today’s government contracting environment, development of your organization’s fiscal year budget plan is complex. Whether you’re using a Top Down versus Bottom Up budget method, most contractors must take into account the reality of Lowest Price Technically Acceptable (LPTA) procurement's. image: https://sql.sympaq.com/hubfs/2019%20budget%20planning.jpg --- [Contact: 800-437-8151](tel:18004378151) [Help Desk](https://aldebaron.assist.com/portal) [![DCAA Compliant Accounting System | SYMPAQ](https://sql.sympaq.com/hubfs/crop-trans-logo.png "Government Contract Cost Accounting")Project Cost Accounting Software for Government Contractors](https://www.sympaq.com/) - [PRODUCTS](https://www.sympaq.com/) - [SYMPAQ Accounting](https://www.sympaq.com/sympaq-sql/) - [SYMPAQ Time & Expense](https://www.sympaq.com/sympaq-etx/) - [SYMPAQ DEMOS](https://www.sympaq.com/demos/) - [PRICING](https://www.sympaq.com/sympaq-pricing/) - [SERVICES](https://www.sympaq.com/services/) - [AUDITS](https://www.sympaq.com/dcaa-audits/) - [DCAA Audits](https://www.sympaq.com/dcaa-audits/) - [Single Audits](https://www.sympaq.com/a-133-audits/) - [RESOURCES](https://www.sympaq.com/#) - [Events / Webinars](https://www.sympaq.com/events-schedule/) - [SYMPAQ Demos](https://www.sympaq.com/demos/) - [Useful Links](https://www.sympaq.com/useful-links/) - [BLOG](https://sql.sympaq.com/blog) [![REQUEST DEMO](https://no-cache.hubspot.com/cta/default/2695973/fa292e59-f01d-4acf-b907-53fc989efa07.png)](https://cta-redirect.hubspot.com/cta/redirect/2695973/fa292e59-f01d-4acf-b907-53fc989efa07) [![DCAA Compliant Accounting System | SYMPAQ](https://sql.sympaq.com/hubfs/crop-trans-logo.png "Government Contract Cost Accounting")Project Cost Accounting Software for Government Contractors](https://www.sympaq.com/) - [PRODUCTS](https://www.sympaq.com/) - [SYMPAQ Accounting](https://www.sympaq.com/sympaq-sql/) - [SYMPAQ Time & Expense](https://www.sympaq.com/sympaq-etx/) - [SYMPAQ DEMOS](https://www.sympaq.com/demos/) - [PRICING](https://www.sympaq.com/sympaq-pricing/) - [SERVICES](https://www.sympaq.com/services/) - [AUDITS](https://www.sympaq.com/dcaa-audits/) - [DCAA Audits](https://www.sympaq.com/dcaa-audits/) - [Single Audits](https://www.sympaq.com/a-133-audits/) - [RESOURCES](https://www.sympaq.com/#) - [Events / Webinars](https://www.sympaq.com/events-schedule/) - [SYMPAQ Demos](https://www.sympaq.com/demos/) - [Useful Links](https://www.sympaq.com/useful-links/) - [BLOG](https://sql.sympaq.com/blog) [![REQUEST DEMO](https://no-cache.hubspot.com/cta/default/2695973/fa292e59-f01d-4acf-b907-53fc989efa07.png)](https://cta-redirect.hubspot.com/cta/redirect/2695973/fa292e59-f01d-4acf-b907-53fc989efa07) [![DCAA Compliant Accounting System | SYMPAQ](https://sql.sympaq.com/hubfs/crop-trans-logo.png "Government Contract Cost Accounting")Project Cost Accounting Software for Government Contractors](https://www.sympaq.com/) menu close close - PRODUCTS - [SYMPAQ Accounting](https://www.sympaq.com/sympaq-sql/) - [SYMPAQ Time & Expense](https://www.sympaq.com/sympaq-etx/) - [SYMPAQ DEMOS](https://www.sympaq.com/demos/) - [PRICING](https://www.sympaq.com/sympaq-pricing/) - [SERVICES](https://www.sympaq.com/services/) - RESOURCES - [Events / Webinars](https://www.sympaq.com/events-schedule/) - [Useful Links](https://www.sympaq.com/useful-links/) - [BLOG](https://sql.sympaq.com/blog) ## Blog ### Subscribe to our Blog # Your 2019 Budget – Top Down or  Bottom Up? [Business Tips](https://sql.sympaq.com/blog/topic/business-tips), [Budgeting](https://sql.sympaq.com/blog/topic/budgeting) 10/30/2018 [G. Chris Brown](https://sql.sympaq.com/blog/author/cbrown) ![2019 budget planning](https://sql.sympaq.com/hs-fs/hubfs/2019%20budget%20planning.jpg?width=300&name=2019%20budget%20planning.jpg)Is your budget a Bottom Up or a Top Down plan of revenue and expenses? The method used will most likely will determine how the plan is executed. Are the federal markets you serve aligned with federal spending upticks? Is your budget an achievable “visionary” plan or status quo? Is your plan designed for a top line set of revenue goals or is it a bottom line profit making plan? In [today’s government contracting environment](https://sql.sympaq.com/blog/important-aspects-about-dcaa-trends-compliance), development of your organization’s fiscal year budget plan is complex. Whether you’re using a Top Down versus Bottom Up budget method, most contractors must take into account the reality of  Lowest Price Technically Acceptable (LPTA) procurement's. Based on your company’s capabilities, the markets you serve, and your government clients spending priorities, the budget method chosen is important.   When you have the federal government as your client, you must consider changing spending priorities based on the political and regulatory landscape. No other client has more influence on your business plan and how your budget is developed. How it is derived and who has input in the budget planning process in your organization will dictate how the plan is viewed by all participants for achieving competitiveness and growth goals for the coming year. Is it a high growth market capture plan, or a plan to maintain your existing business base with slower growth objectives? In the government contracting industry, there are companies that augment the government agency’s workforce by providing staffing services with specialized skill sets.  There are R&D think tanks that assist the government in problem solving and to help set a vision for future government priorities. Then, there are companies that design, build and/or sell products. And that is just to name a few types of government contractors.  A Top Down budget is a plan put together by senior management and their advisory team based on data that may not be known by those in the organization other than senior management.  Rooted in the sales forecast and based on price-to-win assumptions are the characteristics of the Top Down approach. A sales forecast is built first by determining if the procurement price submitted by the company fits within the client’s relevant range for selecting bidders. Is the company’s price at the top, bottom, or somewhere in between?  A best and  final sales price is determined when  the company’s business development team forecasts as a better than 50% chance of a win. The final projected sale price for labor, materials and [other costs](https://sql.sympaq.com/blog/accounting-for-your-gov-sales-activities) then must be matched against the [direct and indirect costs](https://sql.sympaq.com/blog/indirect-rate-structures-do-yours-need-to-change) related to the overall projected price. A decision is then made whether not to bid based on the program’s projected profit. Bottom up budgeting is based on participation of lower levels of management based on ground level knowledge of the government contract clients they serve. These are the people who work directly with the government client on achieving goals set forth in their contract(s) and new opportunities as they may exist. Bottom up fits most federal contract profiles where the price competitive nature of the procurement is fierce. The Bottom Up method starts with the establishment of the known business base over the next year.  You then add the current bids submitted factored for historical win rates or similar probability. Finally, you apply estimated timing to new contract wins for when they become operational. Participation by lower level managers in your organization to vet the assumptions and to provide budget adjustments creates revisions to the budget plan and the cost structure to support making a profit. In both cases, indirect cost structures must be aligned for cost benefit analysis. Each and every account that is in the indirect cost structure must be analyzed. For example, does the benefit of an account allocation to a direct cost base align with the dollar amounts being allocated? For either method, you must establish via rigorous analyses so that your indirect costs are properly accounted for based on cost and benefit, and where the final price is derived by adding a target profit allows you to be price competitive. The budget process in today’s competitive environment is more critical to survival in the federal marketplace than ever.  In any scenario, successful execution of your budgets is based on strong discipline where your goals are closely monitored. While high growth is the goal of many government contractors, the reality is that if you are losing money on every direct labor  hour billed or every unit sold, you cannot make up for your losses in increased sales volume.  ### Recent Blogs February, 07 2025 ## [Strong Headwinds Ahead for Federal Government Contractors in 2025](https://sql.sympaq.com/blog/5-challenges-federal-government-contracting-0) [Government Contractor](https://sql.sympaq.com/blog/topic/government-contractor) [Accounting Software](https://sql.sympaq.com/blog/topic/accounting-software) [SYMPAQ Benefits](https://sql.sympaq.com/blog/topic/sympaq-benefits) [Business Tips](https://sql.sympaq.com/blog/topic/business-tips) [Headwinds](https://sql.sympaq.com/blog/topic/headwinds) Poised to bid on contracts with the Federal Government? you will likely encounter challenges with procurement regulations and bureaucracy.[ Read the Blog](https://sql.sympaq.com/blog/5-challenges-federal-government-contracting-0) 0 Comments [Click here to read/write comments](https://sql.sympaq.com/blog/5-challenges-federal-government-contracting-0#comments-listing) January, 10 2025 ## [End of Year Tax Form Filing Has Never Been Easier!](https://sql.sympaq.com/blog/end-of-year-tax-form-filing-has-never-been-easier) [tax](https://sql.sympaq.com/blog/topic/tax) [2024](https://sql.sympaq.com/blog/topic/2024) As we learned last year when the paper filing threshold dropped from 250 for each tax form to 10 tax forms in aggregate (i.e., 1099-NEC plus 1099-Misc plus W2), one should no longer be contemplating t\[...\][ Read the Blog](https://sql.sympaq.com/blog/end-of-year-tax-form-filing-has-never-been-easier) 0 Comments [Click here to read/write comments](https://sql.sympaq.com/blog/end-of-year-tax-form-filing-has-never-been-easier#comments-listing) December, 04 2024 ## [Another Year, Another End-of-Year Update](https://sql.sympaq.com/blog/2024-year-end-of-year-update) [2024](https://sql.sympaq.com/blog/topic/2024) One thing we've learned over the years as a software publisher is that unless you are planning on sunsetting a legacy application, you are never "done" with development.[ Read the Blog](https://sql.sympaq.com/blog/2024-year-end-of-year-update) 0 Comments [Click here to read/write comments](https://sql.sympaq.com/blog/2024-year-end-of-year-update#comments-listing) ![](https://sql.sympaq.com/hs-fs/hubfs/crop-trans-logo.png?width=200&name=crop-trans-logo.png) We are focused on delivering reliable cost accounting, timekeeping and expense reporting solutions to labor-intensive federal government contractors and not-for-profit organizations in search of fully compliant, standards-based, project accounting software. ### Get In Touch [contact@sympaq.com](mailto:contact@sympaq.com) Local phone:[(301) 670-0858](tel:3016700858) Fax: (301) 840-1591 15839 Crabbs Branch Way, Rockville, MD 20855. 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