Zero-based budgeting (ZBB) is a budgeting method in which each department or activity within an organization starts its budget from zero, rather than using the previous year’s budget as a baseline. With zero-based budgeting, every expense must be justified and approved from the ground up, based on the organization’s current priorities and needs, rather than simply being carried over from previous years.
In other words, zero-based budgeting requires managers to identify and justify each budget item as if it were a new expense, Admission Management, regardless of whether the item was in the previous year’s budget. This approach can help organizations eliminate unnecessary expenses and focus on what’s truly important to achieve their goals.
Zero-based budgeting is often used by organizations looking to streamline their operations, reduce costs, and improve efficiency. It can also help organizations allocate resources more effectively, as each expense is scrutinized and evaluated based on its relative importance and expected impact. While zero-based budgeting can be time-consuming and labor-intensive, it can result in a more efficient and effective use of resources, leading to better financial performance and greater accountability.
