One budget pool, split between departments, with results flowing back to set the next round. Use the buttons to follow the money down and the feedback up.
Departmental budget allocation is how a firm divides its planned spending among the teams that will use it. A total budget pool is set for the period, then split into a share for each department — here operations, marketing, research and development, and support services. The money flows down; the results flow back.
The diagram shows two flows at once. The downward blue flow is the allocation itself: each department's slice of the pool. The upward dashed flow is feedback: how each department spent its share and what it needs next. Together they make budgeting a loop rather than a one-time split.
Because a budget is not decided once and then forgotten. After a period, each department knows how well its plans worked and what it will need next time. Those reports flow back to the center, where they inform how the next pool is divided. The same pool funds the same departments again, but adjusted by what actually happened.
Finance and planning work out what the firm can afford to spend in the period and the rules for sharing it out. This produces the single budget pool the whole firm has to split.
The total is broken into a share for each department. How the pool is divided is the central decision of the whole process, because every department will be funded from it.
Funds flow down to operations, marketing, research and development, and support services. Each department spends its share on the staff, tools and activities it needs to do its job.
As the period runs, each department records what it spent and what it achieved, turning its work into the feedback the center will need.
Those results and next-cycle requests flow back up to the pool. When the next period is planned, the same departments are funded again — but the split is adjusted by what the reports showed.
It is how a firm divides the money it plans to spend among its departments. A total budget pool is set, then split into a share for each department such as operations, marketing, research and support.
In this simplified model, finance and planning set the firm's total and the rules, and the shares are then agreed between the central budget and each department's needs and plans.
Because a budget is not a one-off. Each department reports how it spent its share and what it needs next, and those results feed back into the pool to shape the next period's allocation.
No. Shares usually reflect what each department is expected to deliver and what it costs to run. This diagram shows one pool feeding several departments, not an equal division.
No. It is an abstract educational model of an internal budgeting process. It is heavily simplified and is not financial, accounting or management advice for any real organisation.