ACTIVITY BASED COST management
BMS AFRICA can implement in your organization the ABC Management. It is a practice which can help a company to master its costs and margins, to set up indicators to react in time, to understand from where its profitability comes, to reduce the overheads and to direct the company to his customers.
In fact, you can’t compete or even begin to compare until you know how to cost. ABC is a cost accounting methodology that can define processes, identify the cost drivers of those processes, determine the unit costs of products and services, and create reports on agency components that can be used to generate activity.
A major advantage of using ABC is that it avoids or minimizes distortions in product costing that result from arbitrary allocations of indirect costs. Unlike more traditional line item budget which can’t be tied to specific outputs, ABC generates useful information on how money is spent, if a department is cost-effective, and how to benchmark for quality improvement.
In others words, Activity Based Costs:
- Is a management tool that provides better allocation of resources;
- Is applicable to both appropriations and revolving funds;
- Relates total costs to work accomplisher;
- Aligns costs to outputs, thereby increasing cost visibility;
- Is useful in forecasting financial baselines.
“We bring to organizations Best Practices and World Class Performance Management Approach…„.