...Abstract The present study aims to outline the characteristics of the cost systems used in banking Institutions. It does so by describing the partial costs and full cost systems in banking institutions. It then looks at the limitations of these approaches to the current competitive conditions and goes on to consider the applicability of the activity based costing system in the allocation of indirect transformation costs to branches, products and customers. Finally, we will look at the findings of a questionnaire to Spanish savings banks in order to evaluate how widespread these systems are and how they are used in savings banks. We found that direct costs systems predominate in customer and products entries whereas full costs systems are much more widespread in the case of branches. Furthermore, we also found that the use of activity based costs systems is very limited. 1. Introduction Historically, management accounting in banking institutions was introduced considerably later in comparison with companies in other sectors. There are a number of reasons for this limited development. This was due, on the one hand, to external causes. For example, it was not until the 80's that competitive conditions in the banking sector fostered the development of accounting management planning and control systems. On the other hand, there were also internal conditions that had to do with the nature of the banking business and the operations that these companies carry out, which differ significantly...
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...INTRODUCTION The 1980s is known as the deregulation period for the banking industry and subsequently the increased competition of the 1980s and continuing in the 1990s. The themes of the 1980s and 1990s include total quality management, customer satisfaction, cost, quality and time, technology, market globalization, availability of capital and markets, and finally activity based costing. The purpose of this study is to summarize and analyze the implementation of ABC in the banking industry. Total quality management (TQM) is a process of continuous improvement that focuses on increasing customer satisfaction. TQM is founded on the principle that every customer (internal or external) has a set of spoken or latent needs or requirements. The ultimate objective of TQM is to improve the horizontal linkage of operations to produce a product or service. ABC is a fundamental factor in implementing TQM. The implementation of TQM is greatly facilitated by analyzing organizational activities, linking activities to business processes, evaluating cost of quality (prevention, appraisal, and failure), and determining customer perception of value (valueadded activities). A value-added activity is required to meet customer requirements, modifies or enhances raw materials, is a critical step in getting the product or service to the customer, and adds value that customer might be willing to pay for. If the activity is determined to be a non-valueadded activity, one of four things should happen:...
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...CAN E-BANKING SERVICES BE PROFITABLE? Olga Luštšik[1] Abstract For the last few years European banks have spent billions of euros into new electronic channels. But after some years of excitement banks long-waited sky-rocketing profits from this area didn’t occur. Estonian banks have also invested in expanding and improving the IT systems and a number of new e-banking services have been developed. Until recent time, most of the pricing decisions for e-bank services were made based on a gut feeling as current financial management information systems didn’t support such analysis. In the article author explores the implementation techniques of Activity Based Costing (ABC) in banking sector on example of an Estonian bank in order to analyze the cost structure for traditional and electronic channel transactions. The article shows how it is possible to implement ABC in banking sector and proofs empirically that electronic channels provide cost saving for banks and for bank clients. JEL classification numbers: G21, L11, L86, M40, O31 Keywords: e-banking, profitability, activity based costing 1. INTRODUCTION A few years ago no self-respecting financial consultant would travel without it: the bar chart showing that the marginal cost of Internet banking transactions was a tiny fraction of the cost of branch banking. It was the chart that launched dozens of stand-alone Internet banks. As a result, European banks have poured billions of euros into building...
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...------------------------------------------------- In Management accounting or managerial accounting, managers use the provisions of accounting information in order to better inform themselves before they decide matters within their organizations, which allows them to better manage and perform control functions ------------------------------------------------- Definition[edit] IFAC Definition of enterprise financial management embracing three broad areas: cost accounting; performance evaluation and analysis; planning and decision support. Managerial accounting is associated with higher value, more predictive information.[1] Copyright July 2009, International Federation of Accountants One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers.[2] According to the Institute of Management Accountants (IMA): "Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems,and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy".[3] ------------------------------------------------- Scope, practice, and application[edit] The American Institute of Certified Public Accountants (AICPA) states that management accounting as practice extends to the following three areas: * Strategic management—advancing the role of the management accountant as a strategic...
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...------------------------------------------------- Management accounting From Wikipedia, the free encyclopedia | This article contains wording that promotes the subject in a subjective manner without imparting real information.Please remove or replace such wording and instead of making proclamations about a subject's importance, use facts and attribution to demonstrate that importance. (February 2012) | Accounting | | * Historical cost accounting * Constant purchasing power accounting * Management accounting * Tax accounting | Major types of accounting[show] | Auditing[show] | People and organizations[show] | Development[show] | Business portal | * v * t * e | In Management accounting or managerial accounting, managers use the provisions of accounting information in order to better inform themselves before they decide matters within their organizations, which aids their management and performance of control functions. Contents [hide] * 1 Definition * 2 Scope, practice, and application * 3 Differences between financial accountancy and management accounting * 4 Traditional vs. innovative practices * 5 Role within a corporation * 6 Specific methodologies * 6.1 Activity-based costing (ABC) * 6.2 Grenzplankostenrechnung (GPK) * 6.3 Lean accounting (accounting for lean enterprise) * 6.4 Resource consumption accounting (RCA) * 6.5 Throughput accounting * 6.6 Transfer pricing ...
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...Introduction Activity-based costing (ABC) is a methodology of costing that recognizes activities in an organization as a whole and then allocates the cost of each activity or transaction with resources to all services and products in accordance to the actual consumption by each of the cost. This model assigns more indirect costs into the direct costs when it is being compared to conventional or traditional costing. According to CIMA (Chartered Institute of Management Accountants), ABC is a medium to approach the costing and hence monitor the activities which involves two components: • Tracing resource consumption • Costing final outputs Resources are assigned and allocated to various activities, and further these activities are allocated to cost objects based on consumption estimates that are made through analysis and trend. The latter utilize cost drivers which are assigned to attach activity costs. Aims of Model With ABC, an organization can effectively and efficiently evaluate the cost elements of all the products, activities and services. This helps a company to make decisions which can be either: • Recognize and eliminate those activities that are non profit making and lower down the prices of the ones that are priced high • Or recognize and eliminate processes that are not effective and allocate processing concepts that lead to similar product at a better output Methodology Methodology of ABC mainly focuses on the allocation of cost in management. ABC helps to broadly...
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...Business - Daniels and Radebouqh 2. International Business - Sundaram and Black 3. International Business — Roebuck and Simon 4. International Business – Charles Hill 5. International Business— Subba Rao 3.0.2 Strategic management 100 Marks Course Content 1. Strategic Management Process: Vision. Mission, Goal Philosophy. Policies of an Organization. 2. Strategy, Strategy as planned action, Its importance, Process and advantages of planning Strategic v/s Operational Planning. 3. Decision making and problem solving. Categories of problems, Problem solving skill, Group decision making. Phases indecision making, 4. Communication Commitment and performance, Role of the leader, Manager v/s Leaders Leadership styles 5. Conventional Strategic Management v[s Unconventional Strategic Management. The Differences, Changed Circumstance. 6. Growth Acce orators: Business Web, Market Power, learning based. 7. Management Control, Elements, Components of Management Information Sysstems 8. Mokena’s 7 8 Models : Strategy, style, structure, systems, staff, skill and Shared values 9. Group Project Reference Text 1. Strategic Management — Thompson & Striekland McGraw Hill 2. Competitive advantage – Michael...
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...Activity Based Costing: Success is in the Eye of the Beholder By Kim Soin First draft: Please do not quote without the authors’ permission. All comments and suggestions are welcome Correspondence to: Dr Kim Soin The Management Centre Kings College, University of London, Franklin- Wilkins Building 150 Stamford Street, London SE1 8WA Direct Phone Line and Fax: 0207 848 4093 E-mail: kim.soin@kcl.ac.uk 1 Activity Based Costing: Success is in the Eye of the Beholder Abstract The literature on Activity Based Costing (ABC) tends to define the ‘success’ of an ABC system in relation to the decision-making and strategy formulating opportunities it provides based on the ‘logic’ or technical attributes of ABC (Shields, 1995; Malmi, 1997). This paper argues that there is a logic of ABC and tries to identify and illustrate how people relate to, misunderstand and still ‘appropriate’ this logic and start “talking accounting”. This paper shows that the ABC system implemented in this organisation did indeed provide information for decision-making and did to some extent support the logic of ABC. The paper also shows how this knowledge was emergent, the logic was articulated, but not fully understood and it was only when the system was implemented that many attributes of the system were recognised and, in some cases misunderstood. The paper argues that the ‘success’ of this particular ABC system was dependent on the organisational context, and the changing context as well as the logic. This...
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...across different industries 9. Study on creation of luxury brand 10. Strategies used to build successful Internet based customer services 11. Measuring the effectiveness of retail banking of a nationalised bank compared to a MNC 12. Conspicuous consumption 13. Study of awareness and acceptibility of UPVC windows and door systems 14. Opportunities of Financing the NANO’s in Bangalore 15. Changing trends in FMCG industry in India 16. A study of best HR practices in service industry 17. Fundamental analysis of Indian telecom companies 18. Study of consumer behaviour in automobile industry 19. customer buying behaviour towards insurance products 20. Promotion strategies followed in Insurance sector 21. Study on changing consumer preference towards organised retailing from un-organised retailing 22. study on “impact of advertising in B2B marketing” 23. Distribution network & general insurance industry 24. A study on distribution channels in aluminium industry 25. Study on strategies for promoting retailers’ brands 26. Study of operations & marketing of chemical goods in SSI 27. The impact of tax on electronic goods & products (industrial marketing) 28. Merchandising key account management in apparel exports 29. Effect of marketing in mobilization in BPO segment 30. Marketing in FMCG sector 31. E-marketing of financial services: Relationship approach 32....
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...Information on the costs of an organization’s products and services. For Example, managers can use product costs to guide the setting of selling prices. In addition, these product costs are used for inventory valuation and income determination (Horngren and Foster, pp. 2). * Budgets: A budget is a quantitative expression of a plan. * Performance reports: These reports often consist of comparisons of budgets with actual results. The deviations of actual results from budget are called variances (Horngren and Foster, pp. 3) * Other information which assist managers in their planning and control activities. Examples are information on revenues of an organization’s products and services, sales back logs, unit quantities and demands on capacity resources (Kaplan and Atkinson, pp. 1). Managerial Accounting Practices around the World Traditional managerial accounting systems are mainly designed to measure the efficiency of internal processes. In the 1980’s, traditional managerial accounting practitioners were heavily criticized on the grounds that their practices had changed little over the preceding 60 years, despite radical changes in the business environment. The last decade’s new managerial accounting practices such as activity-based-costing, the balanced scorecard and bottleneck accounting were developed. Unlike traditional managerial accounting, activity-based-costing...
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...understanding and effective management of customer profitability. Customer profitability management (CPM) is a strategy-linked approach to identifying the relative profitability of different customers or customer segments in order to devise strategies that add value to most-profitable customers, make less-profitable customers more profitable, stop or reduce the erosion of profit by unprofitable customers, or otherwise focus on long-term customer profitability. Businesses often employ two systems to make sure business processes run efficiently, Customer Relationship Management (CRM) system and an Enterprise Resource Planning (ERP) system. A CRM system deals with managing valuable customer data and enriching it through interactions with marketing and customer support. An ERP system generally handles customer information that is required once orders have been placed. Both CRM and ERP systems independently offer substantial benefits to businesses. Once both systems are integrated it will allow for connectivity between the two, providing even more advantages to businesses. With CRM and ERP integration, organizations can focus more on driving new business and less on the hassles of trying to make data available. Customer profitability analysis attempts to analyze, manage, and improve customer profitability. Activity based costing (ABC) has created a framework for companies to examine more closely the causes of their costs in order to improve management decisions and corporate profitability...
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...insurance companies 2. A study on "why companies should go for outsourcing" 3. Effectiveness of advertising on real estate sector 4. Study on consumer expectations and perceptions towards consumer loans 5. Workers attrition rate at hotel industry is increasing. Study regarding this issue 6. Attrition rates at different sectors 7. Effectiveness and scope of employee referrals in the process of talent sourcing 8. Study of training needs across different industries 9. Study on creation of luxury brand 10. Strategies used to build successful Internet based customer services 11. Measuring the effectiveness of retail banking of a nationalised bank compared to a MNC 12. Conspicuous consumption 13. Study of awareness and acceptibility of UPVC windows and door systems 14. Opportunities of Financing the NANO's in Bangalore 15. Changing trends in FMCG industry in India 16. A study of best HR practices in service industry 17. Fundamental analysis of Indian telecom companies 18. Study of consumer behaviour in automobile industry 19. customer buying behaviour towards insurance products 20. Promotion strategies followed in Insurance sector 21. Study on changing consumer preference towards organised retailing from un-organised retailing 22. study on "impact of advertising in B2B marketing" 23. Distribution network & general insurance industry 24. A study on distribution channels in aluminium industry 25. Study on strategies for promoting retailers' brands 26. Study of operations...
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...Teaching Note Geographical and Industry Setting, Company Size, Time Frame Abstract, Key Subjects PART ONE: COST ACCOUNTING FUNDAMENTALS Chapter 1: The Accountant’s Role in the Organization Chapter 2: An Introduction to Cost Terms and Purposes Carver HBSP United States, Consulting Co. #199006 consulting, 10,000 7p employees, 1994 Daniel Dobbins Distillery, Inc. HBSP #189065 7p TN #189172 Tennessee, liquor distillery, 1988 The managing partner of a relatively new consulting firm is concerned because training costs at the firm's new training center are higher than expected. Analysis of actual costs compared to those expected is required. In addition, he is considering capitalizing some training costs for later amortization. A management control system for the center is also a priority. A distiller increases whiskey production and income declines because of accounting methods in use. Questions are raised regarding the treatment of expenditures, which can be classified as production, inventory, or period costs. The necessary aging process raises added questions about prior period restatements and needed financing. Chapter 3: Cost-Volume-Profit Analysis Hollydazzle.com HBSP New England, #100066 Web retailing, 5p 1999 Describes the underlying economics...
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...the institute of cost accountants of india(ICAI) (A Statutory body under an act of parliament) SYLLABUS 2012 STRUCTURE & contents Evaluation Synthesis ANALYSIS ANALYSIS APPLICATION APPLICATION COMPREHENSION COMPREHENSION COMPREHENSION KNOWLEDGE KNOWLEDGE KNOWLEDGE LEVEL A LEVEL B LEVEL C FOUNDATION COURSE - Syllabus 2012 the institute of cost accountants of india(ICAI) (A Statutory body under an act of parliament) SYLLABUS 2012 STRUCTURE & contents The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1 FOUNDATION COURSE - Syllabus 2012 The Following table lists the learning objectives and the verbs that appear in the syllabus learning aims and examination question. Learning objectives Level A COMPREHENSION What you are expected to understand List Make a list of. State Express, fully or clearly , the details/ facts of. Define Give the exact meaning of. Communicate the key features of. Distinguish Highlight the differences between. Explain Make clear or intangible/state the meaning or purpose of. Identify Recognise, establish or select after consideration. Illustrate What you are expected to know Definition Describe KNOWLEDGE Verbs used Use an example to describe or explain something. The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) ...
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...Managerial & Cost Accounting ACCT610 Activity-Based Management Made Possible By Activity-Based Costing Supervised by Professor Majboor Alnamri Prepared by: EMBA Student 1 KAAU - EMBA Overview • • • • • • Over/Under Costing Methods of Allocating Indirect Cost Refining a cost system Costs/Benefits of ABC ABC in service & retail Example from an Organization 2 KAAU - EMBA Over Costing & Under Costing Over Costing—a product consumes a low level of resources but is allocated high costs per unit. Under Costing—a product consumes a high level of resources but is allocated low costs per unit. KAAU - EMBA 3 KAAU - EMBA Activity-Based Costing Identifies activities required to produce the product or service Determines the cost of the activities Allocates costs to the cost object based on the object’s consumption of activities 4 KAAU - EMBA Methods of Allocating Indirect Cost Cause-and-effect Using this criterion, managers identify the variable or variables that cause resources to be consumed Benefits-received Using this criterion, managers identify the beneficiaries of the outputs of the cost object 5 KAAU - EMBA Methods of Allocating Indirect Cost Fairness or equity This criterion is often cited on government contracts when cost allocations are the basis for establishing a price satisfactory to the government and its suppliers. Ability to bear This criterion advocates allocating costs in proportion...
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