A budgeting method in which all expenses must be justified for each new fiscal budget period is called zero-based budgeting, or ZBB when expressed as an acronym. When using ZBB, an organization starts from a “zero base” and every function within it is analyzed based on its needs and costs thereby building the budget on the actual needs for the new budget period without regard to previous budget periods. The ZBB process allows implementation of strategic goals as an inherent part of the budgeting process in its interconnection to specific organization functional areas.
REF: Investopedia, Definition of ‘Zero-Based Budgeting – ZBB’
To learn about ZBB, I suggest you go to the embedded link contained in the following:
Zero-based budgeting from Wikipedia, the free encyclopedia.
A good article on this subject of zero-based budgeting that you might click on over to read is A Zero Based Budgeting System as presented by FiscalGeek, Personal Finance for Geeks from the Debt Snowball to Homemade Airconditioners.
Now, then, I wish to close this Roland’s Rambings ZBB: Zero-Based Budgeting entry by directing you over to read:
The Pros and Cons of Zero-Based Budgeting, By Michael D. LaFaive, published on Nov. 4, 2003, courtesy of Mackinac Center for Public Policy.