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‫Since 2013, research has shown that the adoption of the zero based budgeting process has exponentially

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‫grown by fifty seven percent each year, over 91 percent of zero based budgeting programs meet or exceed

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‫their targets.

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‫Companies that have adopted zero based budgeting report cost savings between ten and twenty five percent,

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‫which is a vital savings that companies can use to boost their margins or invest in future growth.

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‫While zero based budgeting is best suited for addressing discretionary costs rather than essential operating

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‫costs.

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‫It can be extremely time consuming with the approach. With the adoption of zero based budgeting.

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‫This means that everyone in the program must make room for cost management and their work day, and

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‫this may impact your productivity.

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‫Let's take a look at some of the advantages of zero based budgeting.

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‫One analyzing spending.

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‫Zero based budgeting requires you to identify your team's activities and look at more cost effective

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‫ways of doing them. Two, avoiding budget inflation.

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‫Zero based budgeting makes it difficult for managers to inflate their budgets artificially because they

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‫must explain and justify the activities and expenses.

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‫This can be from a business perspective or functional perspective.

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‫Three.

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‫Increasing communication.

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‫Zero based budgeting encourages discussion around the budget because everyone must explain their expense

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‫of relation to the program and the organization's goals. Four allocating your resources effectively.

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‫Once you complete the zero based budgeting review process, you can allocate funds to the areas where

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‫you need them the most. Five eliminating waste.

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‫As a part of this process, you have to review your activities, decide which are necessary and what

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‫you can eliminate. Six, encouraging efficiency.

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‫One of the main reasons for zero based budgeting is to promote efficiency, especially when, in comparison

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‫to the other three budgeting concepts, we've discussed in this course. The zero based budgeting process

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‫of raw brings visibility and discipline to any organization, and it's highly sought after with these

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‫advantages.