With the increasing competitiveness between companies, delivering quality products and/or services with lean costs is mandatory for organizations. One of the tools developed to increase efficiency, eliminate waste and excess and ensure greater alignment between financial and strategic planning is the Zero Base Budget (OBZ). In the OBZ, all costs and expenses of each department, income and investments are estimated not taking as a reference the historical data of the company, but a zero base. In this way, the OBZ seeks to eliminate superfluous expenses within an organization, leaving the budget less bloated, closer to reality and generating savings.
The application of this methodology requires greater commitment from the managers of the areas, who must prepare budgets in a strategic way, thinking about the objectives of the organization, demanding time and leaving their comfort zone.
An essential component for the implementation of the Zero-Based Budget is the Matrix Management of Expenses. This tool allows for greater clarity and ownership of the organization's costs. The main concepts to be defined by the Matrix Management of Expenses are listed below:
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Packages: Expenses that belong to the same category (example: IT);
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Entities: Expenses made by a set of cost centers/business units (example: Production, Marketing, etc);
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Package owners: Responsible for defining guidelines, as well as seeking resource optimization, overseeing goals and monitoring the budget;
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Entity owner: Responsible for compliance with guidelines and definition of deviation correction plans.
In conclusion, the Zero-Based Budget is ideal for companies that use the historical basis to carry out their budgets, in order to identify waste and provide increased efficiency. The practical aspects of implementing the OBZ are variable and must take into account the particularities of each organization. An option often adopted by many companies is carrying out the Zero Base Budget every 2 cycles of annual standard budgets, however regulatory aspects of each sector, in addition to the current economic scenario, must be taken into account.
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