Zero Based Budgeting

Zero-based budgeting (ZBB) is a method where every expense must be justified for each new period, starting from a “zero base.” Unlike traditional budgeting, which adjusts prior-year budgets, ZBB requires owners to build their plans from scratch, evaluate needs, align resources with strategic priorities, and justify each cost regardless of past spending. This approach promotes cost discipline, transparency, and alignment with business goals. ZBB often identifies inefficiencies, eliminates unnecessary expenses, and reallocates funds to high-value activities. When supported by analytics and cross-functional collaboration, zero-based budgeting becomes a powerful tool for driving performance improvement and sustainable cost management.