All 34 Zero-Based Budgeting questions
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What is zero-based budgeting (ZBB)? What are the advantages of ZBB? What are the disadvantages of ZBB? Is ZBB used every year? How is it applied practically? What is a decision unit in ZBB? In which sectors or situations is ZBB most commonly applied? What is the main criticism of incremental budgeting that ZBB addresses? What is the end result of the ZBB process? Does ZBB mean every budget starts at literally zero every year? What does 'building a budget from scratch' mean in ZBB?
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Budgeting & Forecasting › Zero-Based Budgeting

How does ZBB differ from incremental budgeting?

Beginner

Answer

Incremental budgeting starts from last period's figures and adjusts them, assuming existing activities continue. ZBB starts from zero and requires justification of every cost and activity each period. ZBB challenges the status quo and can cut waste, while incremental is faster but perpetuates past spending and slack.
Real-world example Incremental adds 3% to last year; ZBB asks whether each activity should be funded at all.

Common follow-ups: Which challenges the status quo? | Which is quicker?

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All 34 Zero-Based Budgeting questions