Which budgeting method adds new funds onto the previously budgeted amount?

Incremental budgeting is a method that takes the previous year's budget or budgeted amount and adds new funds to it for the current budget cycle. This approach often involves making adjustments based on expected inflation, increases in costs, or new initiatives, which are added to the baseline budget from the previous year.

This method is commonly used because it is relatively straightforward and allows organizations to plan based on established historical expenditures. It assumes that the previous budget allocations were appropriate and simply adds to them rather than justifying all expenses from scratch. As a result, it can lead to less scrutiny of the funding needs for each department or project.

In contrast, zero-based budgeting starts from a "zero base" and requires each expense to be justified for each new period. Traditional budgeting is similar to incremental but may include more rigid methods of fund allocation not directly tied to previous amounts. Flexible budgeting adjusts for varying levels of activity but does not specifically focus on adding funds based on previous budgets.