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Budget Around What Actually Happens

Most companies budget like it's still 1985. Fixed departments. Generic categories. Money disappearing into black holes. Activity-based budgeting connects your spending to real work. You see where money goes, why it goes there, and whether that work matters.

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Financial planning workshop showing activity-based budgeting methodology

How Activity-Based Budgeting Changes Things

Traditional budgeting asks "how much did we spend last year?" Activity-based budgeting asks "what are we actually trying to accomplish?" The difference matters more than you'd think.

Connect Costs to Activities

Instead of guessing where money goes, you map every expense to specific activities. Manufacturing widgets costs this much. Running customer support costs that much. Marketing campaigns have their own price tag.

Measure What Drives Costs

Every activity has drivers. Customer calls drive support costs. Production runs drive manufacturing expenses. Once you identify these, forecasting becomes less mystical and more mathematical.

Build Resource Plans

When you know activities and their costs, you can plan resources properly. Need to handle 20% more orders? You'll need X more staff hours, Y more warehouse space, Z more shipping budget.

Step-by-step activity analysis for budget planning

Getting Started: First 90 Days

  • 1

    Map Your Activities

    List everything your company does. Processing orders, shipping products, answering support tickets, running payroll. Get granular but stay practical.

  • 2

    Assign Costs to Activities

    Take your spending and divide it among activities. Salaries, software, rent, equipment—everything gets allocated. This step reveals surprising patterns.

  • 3

    Find Cost Drivers

    What makes each activity more or less expensive? Number of orders, production volume, customer count, marketing campaigns. Measure these.

  • 4

    Build Your Budget Model

    Connect activities, costs, and drivers into a working model. Change one variable and see how everything else adjusts. That's when planning gets powerful.

Quick Wins You'll Notice Fast

Companies typically see these improvements within their first year of implementing activity-based budgeting. Results vary based on your starting point and industry.

Better Visibility

Stop wondering where money goes. You'll know exactly which activities consume resources.

Smarter Decisions

Cut activities that don't deliver value. Invest more in ones that do. Simple logic, better results.

Faster Planning

Models let you test scenarios in minutes instead of days. Planning becomes less painful.

Hidden Savings

Find costs you didn't know existed. Some activities cost way more than expected.

Traditional vs. Activity-Based Budgeting

Old Way

  • Copy last year's numbers and add 5%. Hope nothing breaks.
  • Department heads fight for bigger slices without knowing why they need them.
  • Costs hide in generic buckets. "Overhead" becomes a dumping ground.
  • Strategic changes mean starting the budget from scratch.

New Way

  • Build budgets on planned activities and their actual resource needs.
  • Justify spending with clear links between activities and business goals.
  • Track costs at the activity level. See what drives spending.
  • Adjust models quickly when plans change. Budgets become flexible tools.

Ready to Budget Differently?

Our next cohort starts in September 2025. Eight weeks of practical training designed for Vietnamese businesses. We cover theory, but focus on implementation. You'll leave with a working budget model, not just slides.