What is an activity -based analysis?

Analysis based on activities occurs when the company studies its operations in terms of individual processes through which products and services are created for customers. This process is closely linked to activities based on activities, assigning costs based on how they contribute to production and activities based on activities that try to streamline these costs and improve each individual process to improve the company as a whole. Companies that carry out activities based on activities can determine areas of weakness and work to improve them. In addition, they can find out which activities are most valuable for society and concentrate their resources on these activities.

It is essential for the company to spend time at regular intervals and review the way it does business. If you do not do so, this can lead to poor performance and reduction of results that eventually affect the lower limit. Although it may be tempting to study financial statements and focus on a large financial image can b bI also use useful to look at each step of the process that these numbers are created. The company that uses this approach should consider an activity -based analysis.

One way to make an activity -based analysis is its approach to costs. By separating costs according to what processes they finance, the company can see waste areas or inefficiency. An important part of the cost -based costs is identifying these costs, which means that it is related to a single result or product or indirect, which means they are shared by more activities. In addition, the cost drivers must also be emphasized, the specific reasons why costs are collected by different activities.

There are specific proceedings that are closely associated with an activity -based analysis. If there is a specific part of production or services that requires large costs, it shouldBeing inserted an effort to try to remove this mismatch. Areas where costs are kept low should be studied, so the same procedures used in these areas can be applied elsewhere.

Using an activity -based analysis is a good way to manage the company's registered areas. Some activities, hence, add more value to business than others that may not help the lower line. The value -producing activities should be emphasized and should have the first crack for corporate sources. These activities that are less valuable could be necessary to alleviate or, if possible, to improve efficiency and reduce costs.