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 ?
1) Zero-based budgeting is a repeatable process to build a sustainable culture of cost management.
HE added: "The Ministry's main goal behind adopting a zero-based budgeting system is to have access to real cost through measuring the cost of all approved activities and comparing them to the cost of similar activities offered in private sectors.
Using the zero-based design approach, we decided that we could find a way to cut the retail cost of a solar-powered drip irrigation system to $4,000 for 1 ha (2.
Lamontagne has responded to criticism that his zero-based budgeting plans would be difficult, telling The Lobby when reached last month, "it's time to challenge the status quo" and engage in true budget reform by asking every agency to reconstruct their budgets from the ground up.
Four uniquely available zero-based range output options include 0-15 psig (0-1.
The application of zero-based budgeting supports the objectives of the UAE to achieve competitive capabilities and performance efficiency and increase transparency in government spending.
By going back and doing zero-based, you try to avoid biases of leaving numbers in from one year to another that might not be the best spent dollars.
He offers many of the same solutions - zero-based budgeting, pension reform, and improved tax and regulatory system.
Patrick follows through on his idea to institute zero-based budgeting, requiring annual scrutiny of all programs and perks rather than rolling them over from year to year.
We are launching a zero-based project to structure a completely new organization that is 100 percent member-driven," Mr.
The current-to-pressure (I/P) and voltage-to-pressure (E/P) Type 900X transducer is available with zero-based units ranging from 0-7.