Activity-Based Management for Financial Institutions: Driving Bottom-Line Results

Foreword

With this book Brent Bahnub has made an important contribution to the body of knowledge of managerial accounting by providing a comprehensive guide to the key aspects of activity-based costing—generating interest and buy-in for it, designing the system, avoiding implementation pitfalls, and applying its information for decision support and analysis to drive bottom line results. This book provides hope for those who recognize the deficiencies of their existing traditional costing methodology and system. It reveals what can now be accomplished by leveraging the progressive power of information technology that was only recently developed and mastered in the 1990s.

Have there been other books written about activity-based costing and management? Of course. I even authored a few. But the majority of material written about activity-based costing (ABC) described outcomes from before ABC software was advanced to the stage to accommodate much more flexible modeling including multi-stage cost assignments, multi-dimensional viewing, and scoring costs with attributes (like value-added versus nonvalue-added), to name a few.

Brent is proof of a hypothesis I have long held—that those who have actually experienced implementing a project or system are far more capable of explaining the concepts than those who simply research it.

THE NEED TOREPLACE TRADITIONAL COST MEASUREMENT METHODS

To provide some background, before flexible modeling with ABC principles became possible, accountants ...