CPA Firm Says Small Businesses Need To Learn Their ABCs

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CPA Firm Says Small Businesses Need to Learn Their ABCs

(Dallas, TX) Robert W. Scroggins, CPA says that many small businesses can use activity-based cost concepts to help deal with rapid changes in business markets, practices, and concepts.

Businesses have historically stressed cost control when trying to improve efficiency, but this can hurt in the long run. For instance, sales could fall off if advertising costs are reduced arbitrarily, or plant output could decrease if employees are dismissed in order to save on payroll costs," says Robert W. Scroggins, a Dallas, Texas CPA. The theory behind activity-based cost (ABC) is that activities consume costs, so activities must be considered in any attempt to increase efficiency. ABC uses standard cost accounting techniques to identify business activities, analyze their costs, and classify them as to whether or not they contribute to the mission and goals of a business.

Scroggins says there are many current 'buzzwords to describe techniques used to deal with the rapid changes business is currently undergoing. Best practices, business process reengineering, benchmarking, and value analysis are some of the most common techniques," says Scroggins. These techniques are employed by outside consultants who help businesses cope with change."

ABC is kind of a shortcut that a business can employ to achieve the same results as these techniques but at much less cost and without a continuing reliance upon outside consultants. Many small businesses need to make changes in their business processes but put it off because they think that they will have to hire an expensive industrial engineering firm or a team of consultants to do so. By adopting ABC techniques, however, they can have activity-based management, which can lead to continuous improvement if ABC is emphasized in different areas of the business in a rotating manner. All thats needed is an ABC/ABM 'facilitator and an implementation team composed of knowledgeable employees. The facilitator can go away after the employees are trained in ABC concepts," Scroggins concludes.
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For Further Information contact Robert W. Scroggins, CPA
E-mail rscrogg@atexascpa.com
(214) 941-7021

Robert W. Scroggins, CPA, was founded in 1984 and is located in Dallas, TX. In addition to traditional CPA services, the firm also provides business planning, decision support, and performance improvement services for small to mid-sized businesses by using activity-based cost/management. The firm can be reached at (214) 941-7021 / Fax (360) 838-0943. The company Web site is located at http://www.atexascpa.com.