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wht is zero based budgetting
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Answer Posted / rahul gupta
Zero-based budgeting is a technique of planning and
decision-making which reverses the working process of
traditional budgeting. In traditional incremental budgeting,
departmental managers justify only increases over the
previous year budget and what has been already spent is
automatically sanctioned. No reference is made to the
previous level of expenditure. By contrast, in zero-based
budgeting, every department function is reviewed
comprehensively and all expenditures must be approved,
rather than only increases. Zero-based budgeting requires
the budget request be justified in complete detail by each
division manager starting from the zero-base. The zero-base
is indifferent to whether the total budget is increasing or
decreasing.
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