Zero-based budgeting is a financial planning system that starts from the assumption that each cost must be justified for every new period. Instead of starting with the previous year’s numbers, zero-based budgeting begins with a clean slate and reevaluates each and every expense. This allows businesses to prioritize expenses, allocate resources more efficiently and focus on long-term strategic initiatives rather than just short-term goals. Ultimately, it helps organizations be more efficient in their spending decisions, ensuring they can make the most of limited resources.