Listen to a Business English Dialogue About Zero base budgeting
Stella: Hi Tyler! Have you heard of zero-based budgeting in business finance?
Tyler: Hey Stella! Yes, zero-based budgeting is when companies start their budget from scratch each year, rather than just adjusting the previous year’s budget. It requires departments to justify all expenses, which can help eliminate inefficiencies.
Stella: That makes sense. So, instead of assuming expenses will be the same or increase, they have to justify every expense as if it’s the first time they’re spending it?
Tyler: Exactly! It encourages careful consideration of all expenses and prioritizes spending based on the needs and objectives of the company, which can lead to more effective resource allocation.
