Zero Base Budgeting is a budget methodology that seeks to take into account the company’s operational plans and needs, without using historical bases or readjustment indexes, as in the traditional model.
One of the key advantages of adopting this option, especially in relation to fixed expenses – OPEX, is that, when managers execute the budget from scratch they have to analyze each expense more thoroughly, identifying the main drivers that generate expenses and consequently allocating resources more efficiently.
However, the process is more time consuming for managers since they have to estimate quantitative drivers and unit prices with a higher level of detail to plan each expense account. The process involves several managers and a great amount of information and can be quite challenging.
CTI implements a ZBB and expense control planning solution, backed by a dedicated system which enables managers to be held accountable for collaborative budgeting. This holds true for those responsible for quantitative drivers and also for those responsible for unit costs.
The system also allows for Actual x Budget daily monitoring, giving visibility to expense spikes and facilitating monitoring of timely recovery actions.
- Higher budgetary control.
- Reduced historical inefficiencies in future budgets.
- Reduced operational effort by using a WEB system.
- Tailored definition and construction of cost drivers that generate costs, for each company.
- Budget simulations and monthly rolling forecasts.
- Systemic identification and treatment of budget deviations – effective action on the root cause.
Whatever methodology your company adopts at the present time, CTI has different OPEX expense budget models tailored to meet your needs.
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