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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Everybody must justify every expenditure so that we eliminate any wastage," Mr Rotich said in an interview on December 26."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)."Budget cuts a process technically referred to as fiscal consolidation are expected to free some cash to various sectors that have the biggest impact on growing the economy and creating new jobs.
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.
The City of Garland, Texas, has a long and interesting history with zero-base budgeting, often referred to as ZBB.
Complete due diligence and then build the budget from the ground up, via the use of "zero-base budgeting." 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. We have also been familiar with operational research as a way to make rational decisions.
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.
Zero-base budgeting provides a better chance to evaluate the costs and benefits of security activities.
Zero-base budgeting in budgeting management: A manual for librarians.
In "Zero-Base Budgeting: Modern Experiences and Current Perspectives," Shayne Kavanagh finds ways governments can adapt some of ZBB's original concepts to conform to a contemporary strategic approach to budgeting.
When using zero-base budgeting (ZBB), a government builds a budget from the ground up, starting from zero.