Main menu For students For teachers Explore our subjects Student events & courses

Explore

More for students
Sign in

Free Business resources

Topics

Zero-based budgeting

Zero-based budgeting (ZBB) is a budgeting method where all expenses must be justified from scratch for each new period, starting from a "zero base." Instead of using the previous year’s budget as a starting point, every department must review and justify all their spending as if it were new.

This approach helps ensure that resources are allocated based on current needs and priorities rather than historical trends. It encourages cost efficiency, reduces wasteful spending, and promotes strategic thinking. However, it can be time-consuming and requires detailed analysis and justification for each line of the budget.