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Articles

Learn Zero-Based Budgeting 2.0 with New FP&A Guide

  • By Nilly Essaides
  • Published: 7/19/2016
There’s a new brand of zero-based budgeting (ZBB) out there. This new version is founded on the same principles as the first one: strip the budget down and start from scratch. But it’s also more strategic and more targeted than Version 1.0. And it’s about more than just budgeting. It’s applied on a less overarching basis. Instead of running a zero-based budget for everything with every cycle, companies rotate cost areas on a periodic basis.

AFP’s latest FP&A Guide, Zero-Based Budgeting 2.0: A New Take on an Old Method, helps financial planning and analysis (FP&A) professionals learn how to own the budget by emphasizing what’s most important. According to Deloitte, ZBB can cut costs by 15-25 percent within six months. Furthermore, ZBB has been shown to allow companies to sustain cost savings over time, free up capital to invest in growth initiatives and catalyze broader collaboration across the organization.

“The big success stories are where ZBB was integrated into the business management process and culture and became an opportunity to rationalize activities throughout the entire value chain,” said Philip Peck, vice president of finance transformation at professional advisory firm Peloton. “ZBB needs to be viewed through a process-focused lens.”

Download Zero-Based Budgeting 2.0: A New Take on an Old Method  here.
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