5 disadvantages of zero-based budgeting

5 disadvantages of zero-based budgeting

Zero-based budgeting emerged in the late 1960s as a response to incremental budgeting. With zero-based budgeting, all budgets start at zero and activities/costs are only allowed if they are justified under investigation. All requests for resources must be presented and evaluated on the basis of cost-benefit. Zero-based budgeting is best suited to discretionary spending where there is no clearly defined input-output relationship such as in marketing, research and development, and training or public sector organization such as district councils. read more