The costs of not doing, which traditional cost accounting cannot and does not record, often equal and sometimes even exceed the cost of doing.   Activity Based Cost Accounting can therefore provide organizations with more than just a cost management tool, when implemented effectively it becomes a strategic weapon. ABC allows organizations to focus on understanding activities, processes, and true costs that drive the middle line.

Activity Based Cost Accounting works especially well in service industries where traditionally costs are difficult to isolate. Integrated technologies have made ABC much easier to implement and ABC has changed how managers evaluate new process technologies (if it is worth it to implement).

ABC is applicable across the broad spectrum of company functions, helping manager's focus on improvement in the areas that will have the greatest impact on the bottom line. Reducing the spending on resources required to perform specific activities or increasing the output those resources produce are accomplishments made attainable through ABC Accounting.

Success Profiles can help your company effectively implement an Activity Based Cost Accounting program.  Ask us how.

"Activity-based costing records the cost of not doing, such as the cost of machine downtime, the cost of waiting for a needed part or tool, the cost of inventory waiting to be shipped, and the cost of reworking or scrapping a defective part."

Peter Drucker