The Idea of Zero Based Budgeting (ZBB)

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The Idea of Zero Based Budgeting (ZBB)
Logan M. Cheek, Investor, United States

All the above points are true, but lose sight of the forest for the trees. ZBB is a process of alternatives, not austerity.
The idea of going to zero base is not to cut costs, but to force everyone -- especially at the operating levels -- to come up with creative, better alternative ways of doing things differently than they've been done in the past, then to define levels of effort and spending for each -- from a bare bones minimum to incremental ups -- for ranking and decision making.
The result is sometimes a "cut" in spending from past levels. But creative minds often come up with something involving more spending.
It requires a lot of commitment of time -- and emotion -- and most organizations might be better off doing it every 2-3 years.

Zero Based Budgeting
Elmer M. Tolentino, Accountant, Philippines
Well, that's the way to grow and adapt to everlasting challenge post by changes. New creation, however, it may costs spells the basis of adaptability to changes.



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