ABC Focus activity based costing benefits

Know the total real costs of products, services and unused capacity.

By real costs we mean the direct as well as an appropriate proportion of indirect overhead costs. A standard costing model (that is not based on activity based costing techniques) only caters for direct costs – the components and labour used directly in manufacturing an item. An activity based costing model provides a better estimate of the real costs because it brings in an appropriate proportion of the indirect costs associated with the manufacture of an item (or providing a service). ABC Focus uses activity based costing to obtain total real costs very easily. It helps identify where efficiency improvements should be directed in the delivery of products and services. Enables management to control usage of materials, operational costs and track employees’ time. Management can compete more effectively if they understand their costs.

ABC Focus is much easier to use than its competitor product

The time to master the use of ABC Focus is minimal (a few hours). Installation is a matter of minutes. For those who prefer to work independently there are accompanying tutorials provided with every package. The user can learn to use ABC Focus in an afternoon, whereas the competitor products usually need a substantial training course.

The competitor products are hugely more expensive in the cost of the package and the time and cost of training. without necessarily providing a significant amount of additional functionality.

Activity based costing models fail when people build too much accuracy and hence complexity into the model. Our philosophy is that the model needs to be sufficiently accurate that you can make good business decisions, yet not so complex that it is difficult to understand. Our competitors have much more complex components to learn and the audit trails are difficult to see which invites skepticism about the numbers amongst managers, particularly if the numbers don’t suit their agenda.

With ABC Focus the software is so easy to use that copies of the model can be given to managers for use as a management tool. You don’t need to export the data via a 3rd party for dissemination to managers. Managers get the actual model which they can play with and hence take ownership. Everything is transparent.

 

Know your most profitable and least profitable products and customers.

Get a better understanding of unit costs and profitability by product, customer or process. Know what it costs to do work in your organization.

Allocate costs to product or services by the activities and resources consumed in developing, producing selling and delivering the product or service.

ABC Focus gives you a competitive cost advantage over competitors.

Identify expensive activities that can be targeted for re-engineering

Draw attention to inefficiencies so managers can allocate resources to where they are most beneficial. Instead of only focusing on the costs (e.g. expenses, materials, labour), ABC Focus helps you to focus on what causes the costs (the activities that the organization does that consume resources).

 

Understand the cost trends of a business

Can be used to monitor costs every month, and compare costs month to month. This assists the business to keep a good handle on the cost trends in their business.

Can cost processes (Business version)

The business activities can be grouped into processes. Example of a process: Service clients. ABC Focus will cost all the activities, and then all the processes. The process cost can be analyzed by cost line as well as by activity. This enables the client to understand and manage the costs of their key processes. (Competitors don’t do this as thoroughly or as easily)

 

ABC Focus can include capital costs (Business version)

ABC Focus can incorporate into the model the capital used by activities to obtain the total economic cost of an item. This feature is unique and is not found in most of the competitor’s offerings. It allows the user to obtain the total economic cost of the item.

 

All the benefits of output based budgeting (Business version)

When it comes to budget time, most businesses budget based on inputs (salaries, electricity, etc). With ABC Focus you can budget on outputs. For example, a business produces 100 widgets (products or services). They have set up an ABC Focus model so they know how much it costs to produce each widget and the inputs needed. Next year they plan to produce 120 widgets. ABC Focus can then report what additional inputs are required for the new requirement, and this can be used to prepare the budget for next year.

 

Be productive immediately

Avoid the agony and cost of a lengthy implementation and training schedule. Easily installed and operated with comprehensive accompanying documentation. Install the software and start analyzing and understanding the cost of your products, services or unused capacity.

ABC Focus makes activity based costing techniques accessible to a wide range of users. When the package was reviewed in Charter (published by The Institute of Chartered Accountants). the conclusion of the reviewer, a senior accountant at Ernst & Young, follows:
"ABC Focus is a tool which makes perplexing ABC concepts simple to understand and use. Overall it is a very attractive package because its flexible costing model, combined with multi-user network capabilities, consolidated reporting and a very competitive pricing regime, make it suitable for large or small business in virtually any industry."

ABC Focus is a professional software solution with all the activity based costing benefits without the mega price tag