Zero-based budgeting (ZBB) is a method of budgeting in which the budget is created each year from scratch rather than starting with the budget from the previous year. This implies that each cost should be legitimate and assessed in view of its significance and effect on the organization's targets. ZBB is a useful tool for businesses looking to cut costs and increase productivity because it forces them to revaluate every expense and set spending priorities based on the strategic goals of the company.
ZBB is getting more and more popular in the UAE as businesses look for ways to save money and maximize their spending. However, implementing ZBB can be difficult because developing and analysing each expense takes a lot of time and resources. Employees may also oppose businesses because they believe their budgets are being unfairly scrutinized. Companies must ensure that they have clearly defined goals and objectives, as well as that employees comprehend the significance of cost control and strategic planning, to successfully implement ZBB.