Resolved Question

Could anyone define zero budgeting?

i really dont understand it at all and i have a business exam tomorow any one help??

It would also help if you could explain it very simply lol thanks!

Best Answer - Chosen by Asker

It means throwing out the old budget and justifying EVERY expense from scratch.

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Other Answers (3)

• Gaytheist is the only one even close!
  
  Zero based budgeting is really a way of forcing management to think about the essentials of what the business is for. What would they budget for if they were planning to start the business tomorrow?
  
  By doing this they can drive out the many "nice to have" but unnecessary costs which creep into business over time. eg people producing stats for other people - who no longer use them.
  
  The usual alternative to this is setting budgets based on last years costs plus inflation. This gives an impression of control, but does nothing to change or even identify any ongoing problems.
• Zero budget is a reference to the monetary resources of an independently made project, amateurly as a hobby or otherwise, without any financial commitments made to it save those its owners/developers are willing to invest onto.
  
  A direct meaning being that all work on the project is done voluntarily without any of its contributing members being compensated for their labor.
  
  Hope this would help.

  Source(s):

• It just means that your annual revenues and projected expenses equal out - there are no anticipated losses and no anticipated gains.