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Showing posts with the label A guide to Zero-based Budgeting.

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A guide to Zero-based Budgeting.

What is Zero-based Budgeting or ZBB? Zero-based Budgeting or ZBB is a methodology that helps align company spending with strategic goals. Its approach requires organizations to build their annual budget from zero each year to help verify that all components of the annual budget are cost-effective, relevant, and drive improved savings. ZBB is cost discipline that can help businesses improve resource planning, employee engagement, and organizational collaboration. Although ZBB is often credited with measures to reduce costs, its approach doesn’t exclusively focus on savings and can help test assumptions, solve problems, and ensure that spending is aligned to the growth objectives of the organization. If performance does not meet expectations, ZBB can help businesses identify how to best course-correct for the months ahead. The five main steps in Zero-based Budgeting Businesses can develop or modify their own unique approaches to ZBB, and the following five steps can provide a baseli