Conventional and zero-based budgeting

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What are the advantages and disadvantages of conventional vs. zero-based budgeting?

Oct 3rd, 2015

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Advantages of zero budgeting
It has a surety of being funded efficiently and thus avoids unnecessary expenses.
Promotes improvement of services while utilizing cost-effective methods.
Minimizes ineffective and counterproductive  activities.

Disadvantages of zero budgeting
Justification for every expense may at times be difficult.
In needs commitment and professionalism to implement.
Time taken to do budgets  increases significantly.

Advantages of conventional budgeting
Allows use of a framework of control in an organization.
It is easy to initiate and maintain without problems.
Promote an organization's financial stability by checking on what is spent.

Advantages of conventional budgeting
It at times consumes a lot of time and resources.
It is not responsive to new changes.
The use of bureaucracy and controls demotivates staff members.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Sep 18th, 2015

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