Zero-based budgeting (ZBB) is a financial strategy where every organization must start from a baseline of zero and justify every expense for each new period. Created by Peter Pyhrr in the 1970s, this method shifts focus away from historical spending and toward current operational needs and strategic goals. While the approach can increase efficiency and eliminate redundant costs, it often requires significant time, specialized training, and a complete restructuring of the budget cycle. Historically, the practice gained prominence in the public sector under the Carter administration and has been utilized by major corporations to boost profit margins. Despite its potential for high returns, critics note that the process can be overly bureaucratic and may struggle to account for market fluctuations.

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