Zero-based budgeting or zero-base budgeting (ZBB) is a financial management strategy that allocates resources for each period of an organization’s operation. It differs from the traditional incremental approach in that it treats a baseline as an “infinite” starting point. The term “zero-based” refers to the practice of setting all values (expressed as either dollars or another currency), as if they were zero, before beginning the planning process; this serves as an essential control to prevent unnecessary spending when planning future resource allocation.
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