Zero-based funding is a budgeting approach that involves starting the budgeting process from zero each year, rather than simply adjusting the previous year’s budget. With this approach, each budget item must be justified and evaluated on its own merits, rather than being based on historical spending patterns or assumptions.
In other words, instead of assuming that certain expenses are necessary or justified because they were included in the previous year’s budget, zero-based funding requires that each expense be reevaluated and justified on an annual basis. This can help organizations identify areas where they can reduce costs, eliminate inefficiencies, or allocate resources more effectively.
Zero-based funding can be used by a wide range of organizations, including businesses, non-profits, and government agencies. It can be particularly useful for organizations that are facing budget constraints, as it can help them identify areas where they can reduce spending without compromising their core operations or services.
However, zero-based funding can also be time-consuming and resource-intensive, as it requires a detailed analysis of each budget item. Additionally, it can be challenging to implement in organizations where historical spending patterns or assumptions are deeply entrenched. learn more about School Management System.