What is the difference between projected and actual revenue in the context of zero-based budgeting?

Projected revenue is an estimate of the amount of money a company expects to generate in a future period, while actual revenue is the real amount of money the company has generated in a specific period. In the context of zero-based budgeting, these two figures are compared to identify any discrepancies. If the actual revenue is less than the projected revenue, it may indicate that the company's revenue generation strategies are not as effective as anticipated. On the other hand, if the actual revenue is more than the projected revenue, it suggests that the company is performing better than expected.

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Sometimes you need to take your business plan back to the basics. A zero-based budgeting worksheet is a tool that looks at all your income sources and focuses on the difference between projected and actual revenue. These costs are periodically analyzed to determine if they are still necessary. Zero-based budgets do not apply incremental budgetary increases or decreases.

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Bain's Management Toolkit (Part 2)

Learn from one of the world’s top consulting firms and use its strategies to bring success to your organization. This Bain’s Management Toolkit collec...

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