Introduction of zero base budgeting
Steps involved in the introduction of zero base budgeting
1) Corporate objectives should be established and laid down in detail
2) Decision units should be identified by dividing the organization according to function operations or activities for details analysis
3) An analysis and documentation of each decision unit should be done by a responsible manager keeping the following points in view:
Current operational of decision unit should be identified and linked with organizational objectives.
Alternatives to meet the target should be expressed
Best alternatives should be selected and effects that are required to accomplish the alternative should be documented.
4) Decision units should be split into decision packages ranked in order of priority
5) Budget staff will compile operating expenses for packages approves by departmental heads