Register now or log in to join your professional community.
In a ZBB we start by a clean sheet from the scratch and justify each spending. However, it is time consuming and therefore it is recommended for big companies with high OH.
the benefit is eliminate unnecessary item in pervioes budget.
In zero based budget we start from scratch every year and it
is a flexible budget, in the preparation it evaluate on each expense and revenue stream and each unit in the organization.
Due to that it is an excellent control and evaluation tool, it keep the managers focused to achieve the budgeted goals , it also help lower the unnessecary cost.
a disadvantage is that it requires a massive amount of time and resources to prepare which can be costly.
