All 34 Zero-Based Budgeting questions
More in Zero-Based Budgeting
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 is the difference between ZBB and priority-based budgeting? Is ZBB only about cutting costs? What are the main steps in the ZBB process? What is a decision package in ZBB? How are decision packages ranked in ZBB? Where is ZBB most and least appropriate?
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Budgeting & Forecasting › Zero-Based Budgeting

What does 'building a budget from scratch' mean in ZBB?

Beginner

Answer

It means starting each activity's budget at zero and adding only costs that can be justified for the coming period, rather than starting from last year's budget. Every line of spending must earn its place based on need and value, so nothing is carried forward by default.
Real-world example Each activity's budget is assembled from justified costs upward, not last year's figure adjusted.

Common follow-ups: What is the starting point? | What must each cost do to be included?

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