What Is Zero Based Budgeting (ZBB) And How To Use It?
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In ZBB, the budget starts over at zero at the end of each period.
This is why it is called zero-based budgeting (ZBB).
Each new budget comprises resources from scratch, regardless of previous goals set by the company.
It may be one of the longest-lasting ways to save money when done carefully.
Studies reveal that businesses can cut SG&A costs by 25% annually using ZBB.
When ZBB is used correctly, it has been shown to boost long-term productivity.
This is true for businesses that first find and fix the root causes of costs.
In ZBB, cost-cutting need not be significant as it is based on the top-down goal.
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chegg
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