think about the process of zero-based budgeting. what might one drawback of this method be?
What might be one drawback of zero-based budgeting?
Answer:
Zero-based budgeting is a budgeting method where all expenses must be justified for each new period. While this approach has its benefits like encouraging cost efficiency and strategic thinking, it also comes with some drawbacks.
One drawback of zero-based budgeting is the time and resource-intensive nature of the process. Unlike traditional budgeting methods where only incremental changes need to be made, zero-based budgeting requires a thorough review and justification of all expenses from scratch. This process can be labor-intensive and may require significant time and resources to implement effectively. Additionally, the detailed level of analysis needed for zero-based budgeting can lead to delays in the budgeting process and may not be suitable for all types of organizations.