Zero-Based Budgeting

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Zero-Based Budgeting

People who do zero based budgeting must justify every dollar on their budget allocation.

In some companies, if you received a budget allocation of $800 this year you will automatically receive $800 next year. In these companies you only have to write a justification if you want a budget increase. In contrast, for zero based budgeting companies you must write a justification for every dollar. If you write nothing, you are given nothing. Your budget would be 0.

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