Activity-Based Costing
Activity Based Costing is, fundamentally, an analytical approach to the study of activities undertaken within an organisation and their associated costs/benefits.

Its relevance to the management of the business depends, to a large extent, on the presentation and understanding of the use of the information. It is very important that management use the information in context and understand the approach on which the analysis has been based.

Implementing Activity Based Costing is likely to be a significant project that must be planned and performed carefully. This type of project affects all departments and employees within the scope of the study and will begin to question every activity. The planning and communication before, during and after the project will have a major impact on its success. Although there are many complicated issues associated with the definition and calculation of activity-based costs in any financial institution, the key to any successful system lies in its effective design and implementation.

The success of any project depends on its management. Those responsible for the project must be committed to the achievement of its objectives. They must believe in the value of the successful completion of the project to the organisation. Unless they believe in the need for the project, then the project team will have a difficult task convincing the employees affected by the project of its value. Further, those responsible for the management have key roles in managing the overall scope and in communicating with users to manage expectations and ensure ownership of the results.

We have experience of planning and managing these projects and can work with your management and your project team.

Our principal consultant, Julie Mabberley, has also written a number of books on the subjects of activity-based costing and activity-based management in financial institutions. The three books currently in print are:

Print printable version of this article

 

Terms of Use Privacy StatementAccessibilitySite Map
Copyright © 2002-2017 Global FS Ltd