Zero-base budgeting

Zero-base budgeting (ZBB)

Budgeting method that disregards the previous year's budget in setting a new budget, since circumstances may have changed. Each and every expense must be justified in this system.

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 ?
In fact, we have adopted what's called a zero-base budgeting, so you start from zero and build up by justifying every single cent that you want to spend in the next financial year (2018-19).
Three such processes are biennial budgeting, performance-based budgeting, and zero-base budgeting.
But Beckett also pointed to Texas' early adoption of zero-base budgeting, which, unlike traditional budgeting, has departments start at zero and then justify their spending requests.
In the '70s, Garland embraced zero-base budgeting as a way forward, and jurisdictions today can do the same.
Because finances vary each year, zero-base budgeting helps to achieve the optimum value from available funds from year to year.
Still, because costs can be hard to contain, many campus managers are zero-base budgeting their food operations by focusing on student needs.
We have been presented another method of budgeting against lack of effectivity but also as a means of delegating decisions from higher to lower levels in an organization, namely zero-base budgeting.
Zero-Base Budgeting required a few (fairly simple) procedures.
For example, the concept of zero-base budgeting is well known to logisticians, but during the period between 1980 and 1996, no citations of this concept were found.
Back in the 1970s, Zero-base budgeting (ZBB) was very much in the news.
Kaufmann and Gupta's method for zero-base budgeting used a special class of fuzzy numbers known as triangular fuzzy numbers (TFN; see appendix C for more detail).
The zero-base budgeting process maximizes the fact-to-guess ratio.