Are you financially responsible for a team, department or company? And are you doing your yearly budgeting round based on the budgeting and/or the actuals form last year? Copying numbers from last year’s sheets? Then this can be an interesting practice for you. Throw the numbers from last year away and start with a clean sheet, that’s called zero-based budgeting.
Start your new year budget based on zero, instead of last year. The process of zero-based budgeting starts from a "zero base," and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether each budget is higher or lower than the previous one.
Set up guidelines to help zero-based budgeting:
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