Activity-Based Budgeting - ABB
- Activity-Based Budgeting - ABB
- A method of budgeting in which the activities that incur costs in every functional area of an organization are recorded and their relationships are defined and analyzed. Activities are then tied to strategic goals, after which the costs of the activities needed are used to create the budget.
Activity based budgeting stands in contrast to traditional, cost-based budgeting practices in which a prior period's budget is simply adjusted to account for inflation or revenue growth. As such, ABB provides opportunities to align activities with objectives, streamline costs and improve business practices.
By looking at the cost structure of an organization via the processes that are actually being performed, managers can more effectively analyze the profit potential of a company's products and services. Cost efficiencies can be found by comparing activities performed in different areas of the organization and consolidating or rerouting certain functions.
At its essence, activity-based budgeting begins by looking at results and the activities that created them, as opposed to cost-based budgeting, which often begins with raw input and material and works outward. ABB can also help firms create more accurate financial forecasts.
Investment dictionary.
Academic.
2012.
Look at other dictionaries:
activity based budgeting — ABB A budgeting methodology that focuses on an organization’s cost incurring activities and operations. See *activity based costing … Auditor's dictionary
activity-based budgeting — ABB Establishing the activities that incur costs in each function of an organization, defining the relationships between activities, and using the information to decide how much resource should be allowed for each activity in the budget. ABB also … Accounting dictionary
activity-based budgeting — ABB Establishing the activities that incur costs in each function of an organization, defining the relationships between activities, and using the information to decide how much resource should be allowed for each activity in the budget ABB also… … Big dictionary of business and management
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Activity Based Costing — L’activity based costing, ou méthode ABC est une méthode de gestion de la performance qui permet de comprendre la formation des coûts et les causes de leurs variations. Sommaire 1 Enjeux et histoire de la méthode ABC 1.1 Enjeux de la méthode ABC… … Wikipédia en Français
Activity-based costing — L’activity based costing, ou méthode ABC, est une méthode de gestion de la performance qui permet de comprendre la formation des coûts et les causes de leurs variations. Sommaire 1 Enjeux et histoire de la méthode ABC 1.1 Enjeux de la méthode ABC … Wikipédia en Français
ABB — Abbreviation for activity based budgeting … Accounting dictionary
ABB — Abbreviation for activity based budgeting … Big dictionary of business and management
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