Which budgeting method requires justifying each expense from scratch every year?

The zero-based budgeting method requires justifying each expense from the ground up for every new budgeting cycle. This approach starts from a "zero base," meaning that every department’s budget must be prepared as if you were starting from scratch, rather than adjusting previous budgets. Each expense must be analyzed and justified based on current needs and priorities, allowing for a more thorough review of expenditures and often promoting cost-effectiveness and efficiency in resource allocation.

In contrast, other methods like line item budgeting focus on previous budgets with changes made based on historical data, while lump sum budgeting allocates a fixed total amount without breaking down the specifics of spending. Program budgeting, on the other hand, organizes expenditures according to specific programs or projects but does not typically require justifying every single expense anew. Zero-based budgeting promotes a detailed understanding of all expenses, encouraging a more strategic approach to financial planning.