All 34 Zero-Based Budgeting questions
More in Zero-Based Budgeting
Does ZBB mean every budget starts at literally zero every year? What does 'building a budget from scratch' mean in ZBB? What is the difference between ZBB and priority-based budgeting? Is ZBB only about cutting costs? What is a decision package in ZBB? How are decision packages ranked in ZBB? Where is ZBB most and least appropriate? What behavioral and organizational challenges does ZBB face? What are mutually exclusive and incremental decision packages? What resources and effort does ZBB require to implement well?
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Budgeting & Forecasting › Zero-Based Budgeting

What are the main steps in the ZBB process?

Intermediate

Answer

The steps: define decision units (activities/cost centers); prepare decision packages for each (describing the activity, its purpose, costs, benefits, and alternative service levels); evaluate and rank the packages by priority/value; then allocate resources from the top of the ranking down until funds are exhausted. This forces prioritization of spending by value.
Real-world example Each activity is written up as a decision package, ranked, and funded in priority order within the budget limit.

Common follow-ups: What is a decision package? | How are packages prioritized?

The Budgeting Process Types of Budgets Zero-Based Budgeting
All 34 Zero-Based Budgeting questions