With results based budgeting in Zimbabwe, funds are allocated based on defined progressive steps. Rather than have funds available not tracked to measurable results, results based budgeting provides incentive to perform.
Nhlanhla Yende
Suggest you look at the CIMA website for excellent resource material on budgeting www.cimaglobal.com go to resources and search from there
Traditional budgeting is less precise because money that is left over is not accounted for. Zero based budgeting accounts for every single dollar, hence it is more accurate.
The activity based budgeting will give a percentage of the budget to the sections that are the most used. Traditional just splits it all up evenly.
Zero based budgeting is a really good approach to planning and making decision which is the opposite of traditional budgeting. The term "zero-based budgeting" is sometimes used in personal finance to describe "zero-sum budgeting", the practice of budgeting every dollar of income received, andthen adjusting some part of the budget downward for every other part that needs to be adjusted upward.
Zero-based budgeting is a method of budgeting where all the expenses have to be justified for each new period. This method starts with a zero base and all the functions in a company are analyzed for costs and needs.
Zero-based Budgeting
Time consuming to set up - have to understand the activities that drives the budgetCostly - buying, implementing and maintaining an activity based systemManagers may be overwhelmed with information - may be demotivating, rather than looking at the bigger pictureMore effective methods such as, zero based budgeting and continuous budgeting
in 1964 by U.S Department of agriculture
What are the main characteristics of Zero base budget
Zero-based budgeting can lower costs by avoiding blanket increases or decreases to a prior period's budget. It is, however, a time-consuming process that takes much longer than traditional, cost-based budgeting. The practice also favors areas that achieve direct revenues or production; their contributions are more easily justified than in departments such as client service and research and development.
Political budgeting can lead to budget decisions that may prioritize short-term gains over long-term fiscal stability. This can result in populist measures that may not be sustainable in the long run, leading to deficits and debt accumulation. It can also make it challenging to allocate resources efficiently and effectively based on the needs of the country rather than political considerations.