Can anyone explain zero budgeting
3rd April 2012 From India , Bhopal
Zero based Budgeting would mean that you do not have any previous expense pattern based on which you could predict your future expenses or revenue. You would have to start budgeting from scratch by estimating the amount that would be spent for each and every expense head. You would need to take the revenue from Sales Head/Manager who would provide the Sales Forecast taking into account the market conditions and revenue generated by competitors of similar product.
3rd April 2012 From India , Pune
And a zero based budget doesn't mean that your checking account has to equal zero- it is based on the premise that every dollar has a place to go, and every one of them is accounted for- leaving a "balance of zero". Good luck!
3rd April 2012 From Pakistan , Lahore
Zero-based budgeting (ZBB) is a system of budgeting where the business owner, accountant or, in larger companies, the budget manager starts the budget from scratch each time and justifies each dollar spent based on the strategic goals of the company. This creates the opportunity for companies to capitalize on inefficiencies and to find creative ways to reduce costs. While more time consuming, ZBB better ensures that the resources used are going toward furthering the company’s stated goals.
The defining factor of ZBB is that each budget for the financial year in question is a blank slate. So, each expense in the budget must be justified and clearly linked to the stated strategic goal of the entity. Where do we see this style of zero-based budgeting most often? Most recently, food businesses.
20th July 2018 From United States, Clifton
Zero-based budgeting (ZBB) is an approach to making a budget from scratch. The budget is not based on previous budgets. Instead, the budget starts at zero.
With zero-based budgeting, you need to justify every expense before adding it to the official budget. The goal of zero-based budgeting is to reduce spending by looking at where costs can be cut.
Your employees might be involved in creating a zero-based budget. You can ask employees what kind of expenses they will have and figure out where you can reduce business expenses . If an expense does not benefit the business, or if it can be done in-house, it is axed from the budget.
Zero Budgeting Process:
There are a few different steps in zero-based budgeting to keep in mind. The process of zero-based budgeting follows the same basic steps:
1. Identify business goals
2. Develop and analyze new ways to achieve goals
3. Discover new ways to fund business processes
4. Prioritize funds
By following these zero-based budgeting steps, you will determine what expenses go toward achieving business goals that directly benefit your company. Then, you can find new ways to spend.
26th June 2019 From India,
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