Budgeting Methods in Project Management: Comparative Insights on Top-Down, Bottom-Up, and Activity-Based Approaches

Effective budgeting is a critical determinant of project success, ensuring optimal resource allocation, financial control, and timely delivery. While multiple factors influence project management outcomes, inadequate budgeting remains one of the primary causes of project failure. This systematic review evaluates the application, advantages, and limitations of three widely used budgeting techniques in project management—Top-Down, Bottom-Up, and Activity-Based Budgeting (ABB)—to assess their impact on cost estimation accuracy, resource allocation, and project outcomes. A systematic search of Scopus, Web of Science, and Google Scholar was conducted for peer-reviewed literature published between 2014 and 2024. Forty eligible studies were identified, screened, and synthesized using established inclusion criteria. Data extraction focused on budgeting methodology, project type, industry context, and reported performance outcomes. The findings indicate that budgeting effectiveness varies by project size, complexity, and organizational context. Bottom-Up budgeting demonstrated the highest cost estimation accuracy, achieving 15–30% improvement over Top-Down approaches. ABB provided significant cost efficiency gains (20–40%) in projects with well-defined activities, though it required extensive data and analytical infrastructure. Top-Down budgeting was most effective for ensuring strategic alignment but frequently lacked precision. Across studies, the choice of technique was strongly influenced by organizational goals, project scale, and stakeholder involvement. Budgeting techniques exert a measurable influence on project outcomes by enhancing cost control, transparency, and resource efficiency. While no single method is universally superior, aligning budgeting strategies with project complexity, industry requirements, and organizational objectives is essential. This review provides evidence-based recommendations to support project managers in selecting context-appropriate budgeting methods and leveraging technological tools to strengthen financial planning and decision-making in project management.