If you've not heard of it, zero-based budgeting is a budgeting methodology that's had an increasing amount of press of late; its core premise is that simply rolling over last year's budget and increasing it a bit tends to lead to overspending.
Instead, start everything at zero, and your budgetholders then need to justify each of their budget lines, fresh each time.
The theory here is that you'll tighten up your spending. Which is true.
However, in my opinion, you almost certainly shouldn't do that, at least not regularly and/or across the whole business. There are better ways to assess your spending than putting all your budgetholders through what ends up being quite an antagonistic process.
But, something you should do is look at your process with that eye.
Don't just do what you did last time.
Get together everything you're doing. All your templates and processes. And assess each and every one. Do a cost benefit - is the value to the planning process worth the time the budgetholder takes to do it?
Have I made this as clear and easy as possible?
So many times when I sit down with a customer to do a new project, we realise that some aspects of a process were due to initiatives long abandoned.
This equally applies to reporting, if not more so, since finance is constantly asked to add this and that to reports by different managers, who often either move on or forget about the additions entirely.
So sit down and go through it all - and commit to doing the same again at least each year. Your process will thank you.
