Zero Based Budget Characteristics

Zero Based Budget Characteristics

1.    Start from Scratch

Zero based budget start from the scratch. It means old information and justification for allocation of resources is no more relevant under zero based budget technique.

2.    Re-Justification for Allocation of Funds

Zero based budget technique requires justification for allocation of fund each time (each year). Incremental approach, where resources are allocated on the bases of old justification is no more relevant under zero budget technique.

3.    Re-Define Priorities

Zero budget technique requires re-defining of priorities for every year. Zero budget technique recognizes that priorities changes over the period of time and therefore every year before allocation of funds, those priorities need to be re-examined.

4.    Depth Analyses

Zero budgeting technique required in depth analyses of the activities and therefore more update and accurate than incremental budget.