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Activity Based Budgeting
(redirected from Activity-Based Budgeting)

   Also found in: Acronyms 0.01 sec.
Activity Based Budgeting
A way to budget that analyzes potential activities in which a company can engage. These activities are organized according to the company's goals, and the costs of each are organized to compile the budget. ABB contrasts with traditional budgeting, which usually simply increases the previous year's budget to account for inflation and the like; rather, ABB seeks out new opportunities and allocates resources in the budget based on them. Proponents say that ABB is a more accurate way to forecast budgeting.


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Attended by over 134 employees from the finance and strategy sections of government bodies in Abu Dhabi, the workshop stressed the importance of integrating the strategic, recurrent and capital levels of annual budgeting, under the activity-based budgeting methodology.
Therefore only 1/4 of companies have an overview about modern budget methods such as Activity-Based Budgeting (ABB), Zero Based Budgeting (ZBB) or Beyond Budgeting (BB).
Let's look at the fictional case study of Great Wall Cellars to compare and contrast conventional budgeting, zero-based budgeting (ZBB) and activity-based budgeting (ABB).
 
 
 
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