What does the zero-based budgeting system emphasize instead of simply incrementing previous budgets?

The zero-based budgeting system fundamentally differs from traditional budgeting practices by requiring that each new budget period starts from a "zero base." This means that every expense must be justified and approved for each new period, rather than merely adjusting the previous year's budget. This approach emphasizes building the budget from the ground up based on current service needs and input requirements, rather than following the historical budget figures.

In zero-based budgeting, every function within the organization is analyzed for its needs and costs, and resources are allocated based on efficiency and necessity of the services provided. This method allows organizations to better align resources with current priorities and goals, ensuring that funding is directed to the areas that generate the most value.

The focus on justifying each allocation against service intentions helps organizations to avoid unnecessary spending and encourages a more strategic approach to budget formulation. Hence, the emphasis lies in the necessity of justifying every expense based on operational needs, rather than taking the past budget as a starting point and making incremental changes.