What is a zero-based budget template?
Zero-based budgeting (ZBB) is a budgeting method that allows you to start fresh each fiscal period. It’s different from traditional budgeting because it assumes you’re starting from zero each time you create a new budget, whether that’s monthly, quarterly, or annually.
A Zero-based budgeting template aims to create a clean slate of zero dollars. Using this template gives you a transparent view of your income and expenditures and of what’s financially possible each period. It also forces managers to justify expenses as they must demonstrate a clear need for every business cost in the budget.
How is a zero-based budget different from traditional budgeting?
ZBB is generally considered a tactical approach, and the potential cost savings from tactical approaches tend to be lower. Zero-based budgeting (ZBB) is a budgeting approach that involves developing a new budget from scratch every time (i.e., starting from “zero”), versus starting with the previous period’s budget and adjusting it as needed. In theory, this forces decision makers to constantly look at the business with fresh eyes, free from the limitations of past assumptions and targets.
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