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Zero-Based Budgeting Tool
Write each activity up as a decision package with a minimum, current and improved level, rank them all, and fund down the list until the money runs out.
This tool also runs as a stage in a playbook, which takes you through several tools in order:
- Reduce business costs Stage 4 of 4: what would you fund if you started from zero? Start at stage 1
Not following the playbook?
Decision packages
- One package per activity: what it does, what it costs, and what you get at a lower or higher level of funding.
- Start from nothing, not from last year's figure: every amount needs a reason.
- Many companies start with overhead and discretionary spending, a few functions a year.
Your figures never leave your browser
The packages, what they do and their owners stay on your computer and in your progress file. To write the diagnosis, only the amounts and ticks are sent to our server, by rank. How it works
Rank and fund
Rank every package against the others, then give out the money down the list until it runs out. What sits below the line isn't funded.
- Rank by what each package is worth, not by its size: a package that saves more than it costs rises, whatever it costs.
- Change a package's level to fund it at its minimum, or at the improved level where that pays.
Next year's budget
The ranked list
Checking that the savings arrive
Every month, against the new budget
A few cost measures to track
Save your progress
Download your progress file to continue from this point any time, on any computer: choose it under "Coming back?" at the start of the tool. Each new file includes everything so far, including the earlier stages when they are connected, so keep the latest one. Your work stays in this browser only until you close it.
Not saved yet.
Take your results with you
A PDF of next year's budget, the ranked list with what didn't make it, and the diagnosis. In the playbook, the full report of all four stages.
About the tool
Why it exists
Rebuild the budget from zero, so every amount has a reason
Zero-based budgeting justifies every activity from nothing, instead of starting from last year's figure. Each activity is written up as a decision package: what it does, what it costs, and what happens at a lower or higher level of funding. Managers rank every package against the others, and money is given out down the list until it runs out.
This tool works on its own, and as stage 4 of our playbook for reducing business costs, where the evidence of stages 1 to 3 helps rank the packages. For the method, see our guide to zero-based budgeting.
The method
How the tool works
Three levels. Each package has a current level and, if you can describe them, a minimum level (the least that keeps it going) and an improved level (more money, more result). You choose the level to ask for in the ranking.
The line. Packages are funded in rank order until the money available runs out. The first package that doesn't fit draws the line, and everything below it is not funded.
Protected first. Packages customers pay for, or that the business can't run without, are flagged when they fall below the line. So are packages that save more than they cost: cutting them raises costs overall.
Suggestions. In the playbook, "Suggest packages" drafts packages from stages 1 to 3, and "Suggest a ranking" puts protected packages first, then those that deal with the evidence or pay for themselves. Spending can go up: zero-based does not mean lower.
What leaves your computer. The packages and their owners stay in your browser and your progress file. To write the diagnosis, the page sends our server only the amounts and ticks, by rank, and the server keeps nothing.