Here are some potential disadvantages of zero based budgeting:
- Time consuming - ZBB requires analyzing and justifying every line item and program from scratch each budget cycle, which can be an extensive process that takes a lot of time and resources away from other tasks.
- Lack of continuity - Reevaluating budgets entirely each period provides little continuity from one year to the next. This approach may disrupt ongoing programs and initiatives.
- Difficulty prioritizing - With every expenditure requiring justification, it can be challenging for managers to prioritize spending and determine what is most essential versus nice to have. This can lead to analysis paralysis.
- Resistance to change - Managers and departments may resist the ZBB process since