Calculate the True Cost to Process an Expense Report
Use activity-based costing to estimate the true processing cost of an expense report.
A finance team wants to know whether manual rework or platform fees are the larger driver of expense-administration cost. Activity-based costing The common shortcut is dividing total finance cost by report count and assuming every report consumes similar effort. Identify activities Separate the work into intake, approver follow-up, policy review, and audit sampling. ABC starts by naming the activities that actually consume time. Assign cost pools Estimate monthly labor cost for each activity: intake $3,200, follow-up $4,000, review $5,600, audit $1,200. Now each activity has a cost pool rather than one blended overhead number. Use a driver Map the cost…
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