Zero Based Budget Template

Zero-based Budget Spreadsheet Template

The zero-based budget template refers to the budget that is prepared mainly to justify the expenses for each of the new periods where the budget starts from zero, unlike in case of a traditional budget where the adjustments are made in the previous budgets. Zero-based budgetsZero-based BudgetsZero-based budgeting refers to the budgeting method whereby the expenses and income on the list start from zero. There is no reference point for the budget items, and each of these expenses is individually interpreted as per requirement.read more are prepared in such a manner where the difference between the income from all the sources and the expenses from all the sources comes to zero.

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Source: Zero Based Budget Template (wallstreetmojo.com)

About the Template

• It highlights a person’s income from all the sources for the period under consideration, along with the expenses for the same period—lastly, the difference between the income and expense, which should be equal to zero.
• In the case of the zero-based budget, in the end, the budget should be balanced fully, and one should have zero budget as leftover. The template given above shows the budgeted income and costs expected to be incurred by the company along with the income and costs actual balance for the period.

Components

Following are the different details that are present generally in the template:

#1 – Heading at the Top:

In the template, the heading ‘Zero base budget Template’ will be mentioned. It will remain intact for all the template users. The heading tells the user the purpose of the creation of such a template.

#2 – Summary of the Budget:

This summary detail of the budget is shown at the beginning of the template. It contains details of the Total Income during the period, Total Expenses during the period, and total balance during the period on an actual as well as a projected basis. These figures will be populated automatically from the values derived from the below steps.

#3 – Fixed Expenses:

Under this, the user will enter all the fixed expenses in budgeted and actual values from all the areas.

#4 – Variable Expenses:

Under this, the user will enter all the variable expenses in budgeted and actual values from all the areas.

#5 – Balance:

Balance left will be calculated automatically after subtracting the total of the fixed and the variable expenses from the total income. This balance of projected figures should be equal to zero, i.e., the budget should be balanced fully.

How to Use this Zero Based Budget Template?

Following are the steps to use the Zero base budget template:

• A person using this template has to enter all the details as required in the fields that are not already pre-filled.
• For this, firstly, all the sources of income are identified and entered in the field Income /Funds Received during that period. The amount entered should be net take-home payTake-home PayTake-home pay is the net amount paid to the employees after deducting contributions like retirement account contributions, a premium on insurance, social security and Medicare contributions, benefits and taxes from the gross pay.read more and not the gross pay as the budgets are prepared considering what the person is expecting to receive.
• After the income details, the user will enter all expenses that the company expects to incur for the period under consideration. These expenses are further categorized into fixed and variable expenses to provide a clear picture of the nature of the expenses. However, the category can be modified in the template as per the requirement of the person.
• After that template will automatically calculate the balance left after subtracting the total expenses from the total income of the person. Since this is the zero-based budget, the difference between the income and expenses of the period should be equal to zero. So, till the time this balance comes to zero, people have to make modifications to get this difference as zero.
• After the budgeted details, the figures for actual income received and actual expenses incurred for the period against each activity should be entered.
• From the above figures, a variance will be calculated automatically by deducting actual figures from the budgeted figures for all the activities individually and the total budget as a whole.

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This article has been a guide to Zero Based Budget Template. Here we provide you with a free downloadable zero-based budget spreadsheet to justify the expenses for each of the new periods. Also, you can download and use this template in Excel, Google Sheets, or PDF format.

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