Zero-Based Budgeting (ZBB) - Definition

Zero base budgeting is a strategy that is often employed by businesses, non-profit organizations, and even individuals in planning an operating budget for an upcoming Calendar year. What sets this approach aside is that there is no assumption on the front end of resources in hand to fund the budget. Instead, the line items contained in the budget are based on forecasts of revenue that will actually be generated and received during the period covered by the budget.

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.



Terms near "Zero-Based Budgeting (ZBB)"

Zero-Beta Portfolio
Zero-Coupon Bond
Zero-Coupon Certificate Of Deposit (CD)
Zero-Coupon Convertible
Zero-Coupon Mortgage
Zero-Floor Limit
Zero-Investment Portfolio
Zero-One Integer Programming
Zero-Rated Goods
Zero-Sum Game
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