Development of the activity-based costing management system methodology (ABC management systems)

Project Objective

Develop a progressive methodology (concept), capable of overcoming the limitations of traditional cost management system and to establish a causal link between the products (services, customer) and cost required for their production (service)

Main goals:

  • Business improvement;
  • Increase the competitiveness of the company;
  • Establish adequate costs per unit of product, service and adequate prices accordingly;
  • Impact on the cost-generating factors of various activities;
  • Performance evaluation of both the company and separate type of activity (transactions).

Stages of the project:

  • Introduction to the Company:
    • Strategy;
    • Organizational structure;
    • Business-processes;
    • Accounting reports;
    • Management reporting;
    • Motivation.
  • Development of the methodology for activity-based management system (ABC management systems):
    • Classification, cost grouping;
    • Company’s types of activities;
    • Establishing cause-effect relationship between types of activities and cost drivers;
    • Cost factors characterizing the consumption of costs by activities;
      • Report on the tracking (allocation) of types of indirect and ancillary costs for activities:
      • Format;
      • Calculation algorithms;
      • Data sources
    • Cost objects (product, service, customers);
    • Establishing cause-effect relationships between cost objects and types of activities;
    • Activity cost factors characterizing consumption of activities by cost objects or other activities;
    • Report on the calculation of the amount of each activity factor for the cost objects:
      • Format;
      • Calculation algorithms;
      • Data sources.
    • Report on the calculation of rates per unit cost-of-operation:
      • Format;
      • Calculation algorithms;
      • Data sources.
    • Report on calculation of activity costs allocated to cost objects:
      • Format;
      • Calculation algorithms;
      • Data sources.
    • Profit & loss account (P&L) in terms of cost objects:
      • Format;
      • Calculation algorithms;
      • Data sources.
    • Regulation of processes for activity based costing system
  • Drafting of a document “Methodology for activity based costing management system”.

Conduct procedure:

  • Preparation of a preliminary list of the documents requested from the Customer and analysis of these documents;
  • Preparation of the list of questions for the Customer’s responders and analysis of the answers;
  • Analysis of the information received;
  • Coordination and approval of the developed documents on Methodology for activity based costing management system.

Project Outcomes:

  • Formalized methodology (concept) for activity based costing management system aligned with the goals and objectives of the project;
  • Structured scope of works and investments required for automation of activity based costing management system methodology

Value for the Customer:

  • Presence of ABC management system;
  • Information coming from this system helps to justify management decisions across different areas:
    • Strategic direction:
      • Adoption of price decisions (pricing);
      • Formation of product range (Product portfolio;
      • Increasing value for the customers;
      • Analysis of the competitive situation;
      • Search of suppliers;
      • Analysis of the product strategy.
    • Operational direction:
      • Improvement (reengineering) of business processes, activities;
      • Cost reduction;
      • Managing the cost price of products, services, customers;
      • Establishment of new forms of relations with customers;
      • Motivation of managers.

Contacts:

☎ +99412 555 6070 (Azerbaijan)
☎ +7 727 2581712 (Kazakhstan)
☎ +38 073 7442880 (Ukraine)
☎ +998 97 734 6461 (Uzbekistan)

✉ marketing@rbc-grp.solutions

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