Limitations Of Zero-based-budgeting system

Earlier article describes the history/background and the various benefits of using/implementing zero based budgeting system.

However, the following are some of the limitations or disadvantages of using zero-based budgeting:-

1. A large volume of extra-paperwork will be created
2. It can be costly and time-consuming process
3. Management may not possess the necessary skills in decision analysis
4. Managers may feel threatened by the need to justify expenditure for each budget
5. Manager may resent being continually questioned about how efficiently they utilized resources.

• Budgeting Techniques/Systems : Zero-Based Budget/Budgeting Definition (Part 2)
• The Various Types Of Budgeting Process/Techniques/Systems (Part 1)
• What is Activity based budgeting and briefly describe how it could bring improvements to the budgeting process of an organization
• Limitations of Activity-Based Costing (ABC) System