zero based budgeting emerged to overcome the limitations of incremental budgets accounting essay 2

Zero-based budgeting emerged to get the better of the restrictions of incremental budgets. This attack requires that all activities are justified and prioritized before determinations are taken associating to the sum of resources allocated to each activity. Besides following a zero-based attack zero-base budgeting besides focuses on programmes or activities alternatively of functional sections based on line-items which is a characteristic of traditional budgeting. Programmes usually relate to assorted activities undertaken by municipal or authorities organisations.

Zero-based budgeting plants from the premiss that projected outgo for bing programmes should get down from base zero, with each twelvemonth ‘s budgets being compiled as if the programmes were being launched for the first clip. The budgetees should show their demands for appropriations in such a manner that all financess can be allocated on the footing of cost-benefit or some similar sort of appraising analysis. The cost-benefit attack is an effort to guarantee value of money, it question long-standing premises and serves as a toll for consistently analyzing and possibly abandoning any unproductive undertakings.

That ‘s why more and more non-profit devising organisations, including Oxfam Hong Kong, see utilizing Zero-based budgeting as an attack to judge a best solution of the organisations.

Background of Oxfam Hong Kong

Oxfam Hong Kong is one of non-profit devising organisations. It is an independent international development and human-centered organisation working against poorness and related unfairness. It recognized that much poorness is caused by unfairness and that poorness relief requires economic, societal and structural alteration. It worked with people confronting poorness and with spouse organisations on development, human-centered, policy protagonism and public instruction programmes.

How zero-based budgeting could be used at Oxfam Hong Kong

Most organisations, including Oxfam Hong Kong, may utilize incremental budgeting system for their budgetary procedure. However, this attack has a serious drawback. The budgetary procedure for coming twelvemonth normally uses old budget allotment as a footing of allotment. That may incurred addition or lessening in budget for the coming twelvemonth based on the budget allotment. It is because the per centum of allotment is without full scrutiny of this allocation footing.

Incremental budgeting system assumes that the state of affairs will go on in the same manner. Zero-based budgeting could be used to rectify this serious drawback in incremental budgeting system.

The best suited activities in Zero-based budgeting

To utilize zero-based budgeting as an attack, some activities are really suited to utilize. For illustration:

Limited resource of labors

Oxfam Hong Kong is a non-profit devising organisation that it is ever faced with limited resource of labors because major labors are voluntaries that it frequently has non wages. To form an activity such as “ contribution of poorness states ” , it is a big undertaking that it needs a batch of human resource. The allotment of resource is really of import if the organisation is faced with limited resource of labors. Zero-based budgeting can expeditiously apportion resource of each section. Zero-based budgeting will specify and measure determination bundles of human resource and appropriate allotment by ranking of determination bundles.

Judgment of cargo or in-house

Oxfam Hong Kong ever creates a batch of activities about the contribution of poorness states. To promote more contributions, the organisation ever produces some keepsakes to donators. The keepsakes are besides a portion of cost that Oxfam Hong Kong will be considered to bring forth by cargo or in-house processing. It is because Oxfam Hong Kong would probably take cheap method. It is really suited to utilize zero-based budgeting to the designation. Although incremental budgeting system or activity-based budgeting can find the cost of production by cargo or in-house processing, it merely use section as a base which is less accurate than zero-based budgeting. It is because zero-based budgeting is based on activity which is more accurate than incremental budgeting system or activity-based budgeting.

The advantages of Zero-based budgeting

More and more non-profit organisations choose Zero-based budgeting instead than Incremental budgeting for their determination devising because Zero-based budgeting has following advantages which Incremental budgeting is ignored.

Inappropriate activities are non undertaken

Traditional budgeting tendencies to generalize the past by adding a per centum addition to the current twelvemonth. Zero-based budgeting avoids the lacks of incremental budgeting and represents a move towards the allotment of resources by demand or benefit. Therefore, unlike traditional budgeting the degree of support is non taken for granted. For illustration, when Oxfam Hong Kong has limited resource such as labour hr, the allotment of resources is being really of import. Then Zero-based budgeting can assist Oxfam Hong Kong to choose the best solution of the allotment by ranking of determination bundles. Finally, inappropriate solutions are non adopted.

Enhance motive

The certification of determination bundles besides leads to a deeper staff and direction cognition of all the operation and activities of the organisation and can heighten communicating, engagement and hence motive. Oxfam Hong Kong can indirectly actuate the staff. It is because all sections particularly direction section in Oxfam Hong Kong need to pass on with other sections to do a consensus of the determination bundles.

Refering “ value for money ”

Zero-based budgeting focuses attending on end products in relation to value for money. Through this “ value for money ” attack, inefficient and disused operations are identified so that wastage can be eliminated and a more efficient allotment of resources to activities and sections can be achieved. Therefore, Oxfam Hong Kong can indirectly cut down the cost of choice of determination because the wastage is reduced and the allotment of resource is being efficient.

Problem of Zero-based budgeting

Actually, no method is perfect. Zero-based budgeting besides exists jobs that Oxfam Hong Kong should be faced.

More dearly-won and clip consuming

The readying of determination bundles can bring forth a great volume of paperwork particularly for a big undertaking or activity and will necessitate a considerable direction accomplishment. Therefore, Oxfam Hong Kong should be provided more preparation and instruction about constructs of application of Zero-based budgeting to the direction section because Zero-based budgeting must be clearly understood by directors at assorted degrees to be successfully implemented. The running cost is straight increased. Besides, Zero-based budgeting will requires assemblage, analysis and rating of big sums of informations that the direction section faced with much work load and it is really clip consuming.

Problems of placing ranking bundles

Subjective judgement and political force per unit area are ineluctable in ranking bundles and allotment of resources and may make departmental struggles. Different types and natures of activities across different sections, peculiarly with qualitative instead than quantitative benefits, may give rise to the job of ranking. Oxfam Hong Kong is confused of the determination bundles because it is hard to specify determination units and determination bundles and sometimes subjective judgement is needed. Besides, direction may be exaggerated skews the consequences if it is undependable. Then, the determination bundles are became inaccurate.

Relationship between direction and staff impairment

The oppugning attitude of zero-based budgeting is non ever acceptable to staff or direction because they may see it as a menace to their bing implied rights. For illustration, direction section and accounting section have different thoughts of determination bundles. Each section does non hold with the other side thoughts. The cooperation and motive among the direction and staff may deteriorate. Therefore, it may act upon the relationship of each section in Oxfam Hong Kong.

hypertext transfer protocol: //

hypertext transfer protocol: //

hypertext transfer protocol: //

"Looking for a Similar Assignment? Order now and Get a Discount!
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.


Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.


Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.


Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.


Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.

Get better grades effortlesslyIt’s cheaper than you might think

Effortlessly get the essays and grades you need. You can now get any essay, on any subject and at ANY deadline with just 10 minutes of your time (or less). Your professor will love you for it!