All 34 Zero-Based Budgeting questions
More in Zero-Based Budgeting
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 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? What is the difference between ZBB and priority-based budgeting? Is ZBB only about cutting costs? What are the main steps in the ZBB process?
Advertisement
Back to results for “The Budgeting Process”
Budgeting & Forecasting › Zero-Based Budgeting

What is the main criticism of incremental budgeting that ZBB addresses?

Beginner

Answer

Incremental budgeting perpetuates existing spending and inefficiencies by starting from last year's figures and rarely questioning whether activities are still needed, embedding slack. ZBB addresses this by requiring every cost to be justified from zero, exposing and challenging spending that would otherwise continue unexamined.
Real-world example A legacy activity funded for years purely by incremental habit is challenged and cut under ZBB.

Common follow-ups: What does incremental budgeting perpetuate? | How does ZBB challenge it?

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