Zero-Based Budgeting

Investopedia defines Zero-based budgeting (ZBB) as "A method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a "zero base" and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one."^[1]

History[edit]

ZBB was first pioneered in the early 1970s by Pete Pyhrr, then an accounting manager for TI.^[2]

Effect on government spending[edit]

Several members of congress have indicated that they favor ZBB,^[3] since it would put more emphasis on spending cuts.^[4]

Compare with[edit]

• Baseline Budgeting

External links[edit]

• How to Create a Zero-Based Budget
• Zero-based budgeting, Deloitte US

Videos:

• What Is a Zero-Based Budget?, Every Dollar
• What is Zero-based budgeting (ZBB) | McKinsey & Company
• What is Zero-based Budgeting? | Advantages, disadvantages of Zero-based budgeting.

References[edit]

1. ↑ Zero-Based Budgeting - ZBB. Investopedia.
2. ↑ Meet the Father of Zero-Based Budgeting. Wall Street Journal (March 26, 2015).
3. ↑ In favor of zero-based budgeting. The Hill (June 7, 2012).
4. ↑ Dennis Ross pushes zero-based budgeting for federal government. Washington Times (March 30, 2015).