HOW TO IMPLEMENT ACTIVITY BASED COSTING - the Operational Method

Course Outline

• Introduction and Objectives
• What is Activity Based Costing?
• The 7-Step Implementation Process
1. Implementation Process and Project Plan
2. Resource, Activity and Driver Analysis
3. Create The Cost Flow Diagram
4. Data Collection
5. Build The ABC Model
6. Interpretation and Analysis
7. Integration Into the Management Process
• Next Steps
• What to Do When You Get Back Home

Next Seminar Dates:

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This workshop is currently available only as an In-House workshop.

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And, in our view - the 5 key reasons you should attend this workshop are...

1. It does not focus on software

No more than 45 minutes is dedicated to discussing software options on the second day. We have positioned the course to teach you what you need to know BEFORE you buy software, and we take an objective view of which software is best for you. We briefly demo three software products and give you full demo packages to take home with a more detailed listing of other products on the market.

2. It shows you how to analyze results

What good is a fancy report if doesn't help improve the performance of the organization? Why bring in a bunch of consultants to do it for you, if you can't understand how the information was derived, whether it's right or not and how to do further queries?

This workshop shows how ABC links into other management methodologies, particularly Performance Measurement and Improvement.

To see an example of the type of reports you can produce - Click Here

3. It draws on real-life implementations

This workshop is led by Focused Management Inc. (FMI), who have implemented more live ABC projects than any other consulting group. Running through the workshop are constant references to client examples drawn from service, manufacturing, process and public sector organizations.

To see sample case studies - Click Here

4. It tells you, step-by-step how to do it

Through in-depth case study application and small discussion groups, this workshop follows a 7-step implementation plan, which applies equally to service, health, government, education and manufacturing examples. And it goes beyond implementation to show how ABC integrates with other tools that help drive strategy execution.

To see the ABC implementation process - Click Here

5. It helps you improve/restart a current ABC system

If you have a pilot project in place and don't know where to go from there, or an earlier project that never got off the ground, this workshop helps you understand what didn't work and how to get back on track to make ABC information useful across the organization.

• Teams of management and analytical staff responsible for managing costs
• Vice Presidents of Finance and Operations · Controllers and Operations Managers
• Process Managers / Owners · Team Leaders · Process Improvement Leaders
• Strategic Planners · All Accountants

HOW TO IMPLEMENT ACTIVITY BASED COSTING

8:00 a.m.
Registration

8:30 a.m.
Introduction and Objectives
The objectives for this workshop are to:

• Introduce you to Activity Based Costing
• Walk you through the 7 step process of ABC
• Outline the ABC tools
• New tools for decision making and performance improvement

• What is ABC?
• ABC benefits
• Why ABC is not an accounting issue
• The strategic value of ABC
• Real examples of ABC use
• Will ABC work for your organization?
• Overview of the 7-step method
• Linking ABC to ongoing business process management

• Business issues and ABC objectives
• Identifying major business processes
• Implementation approach - overview of the relation between the general ledger and operational data
• Completion of your scope statement
• Cost objects and how to identify them
• Case study: defining scope and schedule

• Learn how to use the Focused Management Information activity analyzer tool
• Practice driver analysis
• Determine what activities are performed, time spent, resources required and what operational data best reflects the performance of the activities and value of that activity to the organization
• Cost driver examples
• Interview guidelines / check list
• Overview of story boarding as it applies to ABM
• Case study: activity analysis

5:00 Close of Day 1

• Learn how to use the cost flow diagram tool.
• Define macro architecture
• Document the resource, activity and cost object relationships
• Understand the link between ABC and process maps
• Learn how to calculate the cost of cross functional processes
• Case study: constructing the cost flow diagram

• Data requirements, collection methods and data sources
• Integration of information systems
• Data collection templates
• Using financial and non-financial data
• Data source
• Case study: data collection exercise

12:00
Lunch

1:00
Step 5 Build the ABC Model

• Role of software, software options and how to choose
• Preferred software features
• Software options and check lists
• Example of software use

• Reconciliation / Validation
• Activity & Process Costs
• Activity Value Analysis
• Cost Driver Analysis
• Cost Object Analysis
• Profit Improvement Opportunities
• Case study: analysis of results

Step 7 Integration into the Management Process

• Change Management
• Using the Information to Drive Change
• Identify Management Actions
• Use ABC in the Management Process
• Maintaining the Model

Next steps

• Will ABC work for you?
• What to do when you get back home
• Obtain management sponsorship and organization buy-in