Zero Based Budgeting

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Zero Based Budgeting

A system of budgeting where each department or division of a company must justify all expenditures and allocations rather than simply increases over the previous fiscal year. That is, the budget is made with every department starting at zero dollars to spend, and each department must demonstrate need for what it wants to receive. Zero-based budgeting is advantageous because it is more detail-oriented than other forms of budgeting; among other things, it makes it easier to detect and eliminate over-inflated budgets. On the other hand, zero-based budgeting is more difficult and time consuming to put together and often has a bias toward departments that directly produce revenue instead of departments like R&D.
References in periodicals archive ?
ZBB is different from strategic cost-cutting because it's intended as a planned root-and-branch approach to understanding the business and how benefits to stakeholders are derived from inputs.
The methodology of ZBB was developed to address a major criticism of then-current budgeting systems in both the public and private sectors.
ZBB is already UL1741 compliant for both power conditioning systems and AC disconnect switching and IEEE 519 compliant for anti-islanding protection.
Governor Carter read Pyhrr's article (1970) and obtained his help to implement ZBB in Georgia.
ZBB, as Carter and budget theorists envisioned it, required expenditure proposals to compete for funding on an equal basis--starting from zero.
ZBB Energy Corporation is a developer and manufacturer of distributed energy storage solutions known as Zinc Energy Storage Systems (ZESS).
A pure ZBB is likely not warranted for many wholesale operations for the reasons described above.
ZBB continues to work very closely with Meineng on product development, manufacturing and testing.
City staff had considered budgeting methods such as zero base budgeting (ZBB), but staff didn't think ZBB would adequately tell the story of what the city was spending, and how.
Missing from all of our authors' assessments is any mention of the long-running Reform 88 of the Reagan administration and predecessor efforts such as ZBB (zero-based budgeting) and PPBS (planned program budget system).