Comments on: How to grow your business without borrowing http://anthillonline.com/how-to-grow-your-business-without-borrowing/ Business help for entrepreneurs, startups and small business owners in Australia | Business > Innovation > Technology > Entrepreneurship - Anthill Magazine: It's Where Ideas and Business Meet. Sat, 26 May 2012 05:59:00 +0000 hourly 1 http://wordpress.org/?v=3.1.1 By: Lea Patterson http://anthillonline.com/how-to-grow-your-business-without-borrowing/#comment-7777 Lea Patterson Tue, 23 Jun 2009 10:40:49 +0000 http://anthillonline.com/?p=11703#comment-7777 Another very powerful but often misunderstood tool for management is Activity-Based Costing (ABC). ABC has had a bad reputation over the years for being too difficult to implement and maintain, however the methdologies and tools have evolved over the last decade to allow faster and easier models to be developed. A good source of information on ABC is the CAM-I website (Consortium of Advanced Management - International) www.cam-i.org - there are a range of books and resources available from the site. A properly implemented Activity-Based Costing / Management (ABC/M) model can be used to identify true profitability of products, services and customers to support the 80/20 rule above. Identify all direct, indirect (overhead), fixed and variable costs - in particular how the overhead contributes to the end product and/or service to determine the value of the overhead as described above, but also to identify the full cost of providing the overhead service to allow a proper assessment for potential outsourcing. You can extend the ABC/M model by incorporating a range of measures including performance, volume, capacity etc to provide even greater insight into the inner workings of your company. Lea Patterson President - Pilbara Group Inc CEO - ABM Technologies Australia Another very powerful but often misunderstood tool for management is Activity-Based Costing (ABC). ABC has had a bad reputation over the years for being too difficult to implement and maintain, however the methdologies and tools have evolved over the last decade to allow faster and easier models to be developed. A good source of information on ABC is the CAM-I website (Consortium of Advanced Management – International) http://www.cam-i.org – there are a range of books and resources available from the site.

A properly implemented Activity-Based Costing / Management (ABC/M) model can be used to identify true profitability of products, services and customers to support the 80/20 rule above. Identify all direct, indirect (overhead), fixed and variable costs – in particular how the overhead contributes to the end product and/or service to determine the value of the overhead as described above, but also to identify the full cost of providing the overhead service to allow a proper assessment for potential outsourcing.

You can extend the ABC/M model by incorporating a range of measures including performance, volume, capacity etc to provide even greater insight into the inner workings of your company.

Lea Patterson
President – Pilbara Group Inc
CEO – ABM Technologies Australia

]]>