Benefits and limitations of budgeting and budgetary control, including consideration of zero-based budgeting and incremental budgeting
Budgeting helps businesses plan and control their finances, but it also has drawbacks. Two main approaches exist: building a budget from scratch each time, or simply adjusting last year's figures.
Real World
The UK government uses zero-based budgeting in some departments, forcing teams to justify every pound of spending from scratch rather than automatically receiving last year's allocation plus inflation.
Exam Focus
When comparing ZBB and incremental budgeting, always weigh time/cost of ZBB against the waste risk of incremental — examiners reward balanced judgement.
Essay Framework
Use PEEL to structure every paragraph. Tap each step for guidance and an example.
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