Zero based budgeting: Why zero based budgeting—and why now

Why zero based budgeting—and why now? Zero-based budgeting (ZBB) can be the answer for organizations looking to grow the top line, dramatically reduce waste, free up capital, and sharpen their competitive edge. Regardless of your industry or the type of business you’re in, ZBB can be a transformative financial planning technique. Zero-based budgeting is a very effective way to track and reduce spending to achieve financial goals, though it does take more time and analysis than traditional budget methods. Here's everything ... Zero-based budgeting is a method of budgeting that starts each department's budget at "zero"and requires each line of a business's expenses to be justified. This budgeting method stands in contrast with traditional budgeting, which relies on past budgets and only justifies changes to historical budgets. The term "zero-based budgeting" originated from Peter Pyrrh's 1970s book, Zero Based Budgeting: A Practical Management Tool for Evaluating Expenses, however the term has taken on a new ... Zero-based budgeting starts from zero, rather than a traditional budget that is based on previous budgets. With this budgeting approach, you need to justify each and every expense before adding it to the actual budget.