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In the dynamic world of cost and profitability management, selecting the right tool can be critical to business success. In this context, with a variety of systems available in the market, organizations often find it challenging to choose the appropriate tools to support the process of monitoring costs and corporate financial performance. In this article, you will discover why MyABCM stands out as a better alternative to one of these tools: SAS ABM, with advantages ranging from support to operational capacity and flexibility.

MyABCM: Global Presence

Many companies that used SAS would turn to SAS ABM to manage their costs but soon encountered its limitations, given that the solution’s focus is statistical, concentrating on identifying patterns in the analyzed data. In other words, the tool collects information and delivers results such as statistics and analyses, assuming a role very similar to that of a BI.

MyABCM, on the other hand, used in over 50 countries, was specifically developed for the calculation of business costs and profitability, with differentiated support, ensuring that users have assistance when needed. This feature is crucial to avoid difficulties in obtaining help, providing peace of mind to users.

Integration with Other Systems

MyABCM was designed to operate in conjunction with other software used by organizations, enhancing the use of the company’s data. Thus, it integrates fully with all BIs and ERPs on the market, including SAS, ensuring greater efficiency in organizational routines.

Rapid and Efficient Deployment of MyABCM

The speed of implementation is an essential factor in choosing a cost management solution. While SAS ABM has a longer, outsourced implementation, MyABCM is deployed by specialists from the internal team and stands out for its quick setup.

This agility allows companies to quickly start their cost management projects, optimizing transition time and minimizing potential impacts on daily operations.

Processing Capacity and Efficiency of MyABCM

Data processing capacity is another area where MyABCM excels compared to SAS ABM. MyABCM has a powerful calculation engine with optimized processing capacity and speed. Its specialized distribution mechanism, including reciprocal allocations with in-memory calculation, ensures reduced calculation times. This not only saves the organization’s resources but also speeds up the construction of OLAP cubes and modeling analyses, providing more efficient cost management.

Usability and Flexibility: MyABCM at the Forefront

Usability is a fundamental aspect in choosing a cost management tool. While SAS ABM features a less intuitive layout and visualizations, resulting in greater dependency on support and less efficiency in using the solution, MyABCM stands out for its ease of use and intuitive interface.

Moreover, MyABCM ensures greater flexibility, allowing quick and simple revisions and adjustments in cost modeling. The system also accommodates organizational changes without the need to alter the model, preventing the loss of historical information. This autonomy and ease of adjustment make MyABCM a strategic choice for organizations seeking a flexible and adaptable solution, with low dependency on support.

MyABCM, the Smart Choice

In summary, MyABCM emerges as the best alternative to SAS ABM, offering not only reliable support but also rapid implementation, efficient processing capacity, and superior usability. By choosing MyABCM, companies ensure not only a cost and profitability management that meets their needs, with comprehensive and versatile features but also secure a solid foundation for growth.

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Cost analysis in TOTVS is possible with the Protheus system, but it can still be challenging for companies using it in their management processes. There’s no doubt about the quality of the solution for operational routines, as the ERP performs various managerial functions with expertise. However, when it comes to strategic cost management, some limitations may become apparent as the difficulty in understanding the origin and impacts of costs has repercussions on organizational performance.

In this scenario, MyABCM is introduced as a solution specifically developed to optimize costing and enhance business profitability.

Protheus: Excellent ERP, but Limited for Cost Management

It is no coincidence that TOTVS is a market leader in ERPs with solutions like Protheus. However, despite the system’s quality, it is essential to understand that its cost management tools have a more accounting, statutory, and fiscal bias than a managerial one. While ERPs encompass resources such as technical data sheets, chart of accounts, inventory positions, sales volume, and production, the allocation of indirect costs (vital for the financial health of any organization) is overlooked.

Additionally, there are other blind spots when it comes to cost management in an ERP. What if we need to understand who are the best and worst customers from a profitability perspective and not just from revenue? What if we need to reduce the number of allocations to improve cost accuracy?

In these cases, companies have two options:

This is where we come in, to make the day-to-day life of FP&A, Cost, Controllership, and the financial area in general easier, with a powerful and efficient solution.

TOTVS + MyABCM: A Powerful Competition

Companies that already use TOTVS do not need to abandon it to improve cost management, nor resort to spreadsheets that become confusing and difficult to update. MyABCM is a powerful ally, capable of integrating with TOTVS and other systems used in the organization, creating a data ecosystem in which each software contributes its best features to optimize the company’s management.

In other words, MyABCM enhances cost management in TOTVS, offering a robust calculation engine, notable for being the only one on the market to manage cascade costs and reciprocal costs in all modules.

Advantages of Using MyABCM to Calculate Costs in TOTVS

Ready and Configurable Calculation Engine

MyABCM features a ready-to-use calculation engine that only needs to be configured for the company. This simplifies the implementation process and allows for quick adaptation to the specific needs of the business.

Flexible Model with Unlimited Modules and Dimensions

Offering unmatched flexibility, MyABCM allows for the construction of a model with an unlimited number of modules and dimensions, easily adapting to the complexity and diversity of businesses.

Native Traceability

MyABCM ensures traceability between all axes and allocations natively, eliminating the need for additional developments. This provides a clear and reliable view of the company’s financial health.

Efficient Reciprocal Allocations

By enabling reciprocal allocations between interdependent sectors, MyABCM offers an accurate view that is not possible when trying to analyze costs directly in TOTVS.

Advanced Simulation

With its advanced push and pull simulation capabilities, MyABCM enables the creation and exploration of various financial scenarios. This advanced feature surpasses the capabilities of Protheus, providing an understanding of the financial implications of different situations that the company may face.

Detailed Monitoring and Comparison of Costs

MyABCM allows for meticulous tracking of costs in different contexts. With it, the company can analyze and compare actual, budgeted, standard, and cost targets, to get a snapshot of the organization’s financial performance.

Uniting TOTVS and MyABCM for Strategic Cost Management

Cost management in TOTVS through the Protheus solution can reach new heights of efficiency and strategy when integrated with MyABCM. With unique functionalities specialized in cost and profitability management, MyABCM elevates financial management, providing better results for companies seeking a more advanced approach to cost management. Want to learn more about cost management in MyABCM and how to integrate it into your ERP?

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Oracle EPM is a popular system for financial consolidation and closing activities. However, its capabilities for calculating an organization’s costs and profitability are not as powerful, creating challenges for users who try to use it for this purpose.

In this article, we will explore why MyABCM is the more advantageous alternative for calculating business costs and how it can be used in conjunction with Oracle. Currently, about 40% of our clients use Oracle seamlessly integrated with MyABCM and enjoy all the benefits of having a quick, reliable, and easy-to-implement cost management solution.

Oracle EPM: An Overview

Oracle EPM is a suite of enterprise performance management applications that offers various functionalities, including planning, consolidation, and financial closing. While it is a robust solution, there are some limitations to consider regarding strategic cost and profitability management.

MyABCM: A Better and Faster Alternative

Specialization in Cost Management

While Oracle EPM is a comprehensive solution, MyABCM stands out for its specialization in cost management. Designed to effectively manage overhead, MyABCM minimizes allocations and uses more sophisticated allocation rules that make more sense for organizations, allowing for the correct identification of different costs. In this scope, it enables managerial costing of dimensions beyond just Products or Services, including Channels, Customers, Segments, and Businesses.

For these reasons, many organizations that have the Oracle ERP eventually migrate to MyABCM, which addresses these issues more efficiently, more agilely, and with a much faster implementation.

Rapid Implementation

One of the main advantages of MyABCM is its speed of implementation. While Oracle EPM may require an extended implementation and customization period, MyABCM is known for its agility, with implementations that can be completed in just a few weeks, depending on the organization’s needs. This means your company can start reaping the benefits sooner.

Cost-effective Solution

Cost is an important consideration for many companies. And for most cases, MyABCM is a more viable alternative compared to Oracle EPM. With tailored solutions for businesses and projects of different sizes, the system offers greater economy and a high cost-benefit ratio, enabling cost calculation without burdening the organization.

Efficiency and Flexibility

MyABCM is praised for its efficiency and flexibility. It is designed to meet the needs of cost management and offers a wide range of features that can be customized to meet your company’s specific demands, and it is more user-friendly, reducing the reliance on support for modeling and report generation.

Seamless Integration with Oracle Solutions

A concern when implementing a solution is integration with other existing systems. MyABCM integrates seamlessly with Oracle solutions, making migration and coexistence between the two systems smoother. Moreover, it is designed to integrate with BI tools and various software used in the organization, such as SAP and TOTVS, among others.

Quick Availability of Information

MyABCM can quickly provide information after accounting closure and facilitates easy cost management. This allows financial and management teams to access critical data in a timely manner and make decisions much faster.

Multidimensional P&L with Complete Traceability

MyABCM offers a Multidimensional Profit and Loss Statement (P&L) with complete traceability, enabling detailed analyses at the product, customer, and channel levels. This enhanced functionality is vital for making strategic decisions based on accurate information.

Support for Large Data Volumes

As businesses grow, so does the volume of data. MyABCM is capable of handling large volumes of data, ensuring that your organization’s expansion is not limited by the capacity of your financial consolidation solution.

Oracle EPM vs. MyABCM: The Strategic Choice for a More Agile Financial Future

Although Oracle EPM is a solid option for financial consolidation and closing, MyABCM excels in several critical areas, including faster implementation, potentially lower cost, specialization in cost management, seamless integration with other solutions, and quick availability of information.

In 2024, we complete 30 years dedicated exclusively to cost and profitability management, offering a system designed to deepen the understanding of costs in your organization, with detailed data for informed decision-making. If your company values a more agile, economical, and specialized alternative, MyABCM is the solution you are looking for. Fill out the form below and request a demonstration!

Choosing the right software for management plays a strategic role in businesses. While many organizations believe that a single ERP system is sufficient to support their operations, there are systems with different focuses that can make a significant difference in outcomes, such as MyABCM.

Although both are related to the management and control of information, it is important to understand that ERPs and MyABCM serve complementary functions. Keep reading to learn the differences between them.

What is ERP?

ERP is a system that encompasses the operational management of various business areas, such as finance, accounting, human resources, inventory, procurement, sales, and production. Its main function is to centralize information and processes, facilitating the integration of activities across departments, as well as recording daily routines and transactions.

What is MyABCM?

MyABCM has a specific purpose, focusing on cost management and profitability. It stands out for its detailed analysis of costs associated with different areas, products, customers, or processes within an organization.

Thus, it goes beyond daily administration, offering a specialized approach to issues such as profitability reports, process and activity analysis, performance indicators, benchmarks, managerial simulations, and much more.


One of the main differences between these systems lies in the purpose for which each was designed. They play different roles in the organization, so that one does not replace the other. ERP offers broad functionalities for business management, covering the departments it encompasses. Its scope can include inventory control, order processing, payroll, accounting to CRM (Customer Relationship Management), among others.

On the other hand, MyABCM focuses on specialized functionalities for cost analysis, profitability calculation, product and service pricing, strategic decision-making, and financial simulations.

Its detailed approach allows companies to deeply understand their costs and profitability, how they relate to each product, service, customer, or sales channel, providing insights to enhance resource usage and business performance.

Cost and Profitability Management in ERP vs. MyABCM

Cost and profitability management in ERP is quite limited. This is because such systems cover costs primarily from fiscal, tax, statutory, and accounting perspectives, rather than focusing on managerial decision-making regarding costs and profitability. Thus, in ERP, the analysis of costs is more geared towards meeting fiscal requirements than optimizing the organization’s profitability.

In this context, one of the major bottlenecks in cost management in ERP is the imprecise allocation of indirect costs. This type of system employs basically volumetric allocations instead of allocations with criteria that make sense and truly identify how resources are consumed.

Another important limitation is that in an ERP, the focus of costs is only on Product (in the case of manufacturing companies) or Service (in the case of service organizations). However, for efficient cost management, there is often a need to cost other analysis dimensions such as Channels, Segments, Customers, Regions, Businesses, etc.

In a scenario where margins have historically been tightening for organizations across all segments, driving a growing need to ascertain costs for decision-making, companies have two options: try to customize or adapt the ERP (an expensive, complex, and time-consuming solution that requires the support of consultants, integrators, and various experts) or resort to Excel spreadsheets to support these managerial needs.

In contrast, MyABCM was specifically developed to fill these gaps, with features that allow for the calculations and managerial appraisals, eliminating the need for spreadsheets, while integrating with any ERP on the market.


ERPs have a longer implementation period, which can extend for months and require several adjustments to meet the specific routine of each company. This varies according to the complexity of the system and its implementation model.

In contrast, MyABCM has a much quicker implementation, which can take from a few days to a few weeks, depending on the needs of each organization. The implementation team has blueprints and accelerators that speed up the process, making the system available more quickly.


Both systems are capable of generating reports, but the nature and depth of these reports differ significantly. While the reports from an ERP are comprehensive, offering an overview of the company’s operations, in MyABCM, the reports are more specific, providing deep insights into the costs associated with certain areas. This allows for more precise decision-making in terms of financial management of the company.

The system performs a detailed tracking of all costs involved in the activities of the organization. This includes direct and indirect costs, fixed and variable, enabling:

Strategies for Tailored Financial Management

In summary, while ERPs play an important role in the daily management of companies, MyABCM stands out by offering more advanced functionalities for meticulous analysis of costs and profitability, allowing greater financial control and enabling safe decision-making supported by data. Thus, even if a company already has an ERP, investing in MyABCM is a step further to enhance understanding of costs and optimize financial strategies, providing a competitive edge.

Want to see all this in practice? Fill out the form below and request a demonstration!

When we analyze the history of great corporations, we have access to the true lessons of entrepreneurship. Normally, we concentrate on the victories of these companies, but you’d better believe that their defeats are also instructive. One of the most common problems that businesses face is a lack of planning for various financial scenarios.  

It may appear strange to believe that companies don’t take the care to think about various scenarios, but it isn’t uncommon. When business leaders talk about finances, they usually focus their attention on the short and medium term. 

Even though it’s highly recommended to be worried about your accounts at the end of each month, you need to have a better prepared plan for your company. Would you like to understand more about this subject? Then enjoy your reading! 

Pessimistic financial scenarios 

It isn’t very pleasant to imagine, but what happens if the product or service you offer ceases to have practical value? How will you turn this situation around? 

Kodak lived through something close to this dilemma, because it wasn’t prepared for a scenario in which photographic film rolls were no longer necessary. As a result, its sales sank and its market value did as well. 

It’s very important for the businessperson to have an action plan ready for the day in which the company has to face a crisis. This is why you should select which of your investments can be liquidated to inject capital into your company, and should pay close attention to changes in your sector. That way, you won’t be caught by surprise. 

Optimistic financial scenarios 

Imagine that the government creates fiscal incentives that benefit your company. Now think about the possibility of seeing your sales margins increase a lot. How can your business best take advantage of this situation? 

This scenario appears to be unreal, but many companies went through this exact experience when the Brazilian government reduced the Tax on Industrialized Products. It was a very positive scenario for the Brazilian economy.  

However, many entrepreneurs didn’t take advantage of their increase in sales to do more marketing to strengthen their brands — which is something that would make consumers remember their brands in other economic situations. 

Other companies didn’t evaluate the momentary nature of this reduction in taxes and believed that it would last forever, and chose to expand when they could have waited.  

Based on this, you should plan to take advantage of positive moments for your sector, increasing your company’s revenues, investing in business improvements and strengthening your brand.  

Realistic financial scenarios 

If its market continues to grow by the same percentage for the next decade, how will this scenario affect your company’s strategy? 

In this third scenario, it’s important to understand how stability will affect your business, but not just this. Evaluate your sector today, study your company’s data and think about how it would deal with each situation using its current resources.  

To arrive at a good evaluation, it’s important to access data about your company’s processes in a rapid and reliable fashion. Management software that ensures a dynamic analysis is also crucial to projecting a realistic financial scenario.  

Now that you understand a bit more about the importance of planning for various financial scenarios, you need to conduct these studies to protect your business from external market conditions.  

One important tip is to modernize your company’s data analysis. MyABCM can help you in this mission. Get in contact with us and let us answer any questions you may have about this subject! 


We know that companies seek to modernize their processes to become efficient — and, as a result, improve their respective profit margins. Thus, it’s important to understand how logistics technology can help entrepreneurs achieve this objective.  

However, investing in innovation doesn’t just mean changing your equipment, it means incorporating a new way of thinking into your business activities. If this doesn’t occur, a businessperson can make a large investment only to see everything remain unchanged.  

Are you interested in this subject and do you want to learn more about logistics technology? If so, then continue reading this article! 

CRM logistics technology 

Before we address anything else, it’s important to correct a misunderstanding in terms of CRM. This abbreviation stands for Customer Relationship Management.  

Therefore, unlike what many businesspeople think, CRM is not a piece of software, but rather a strategy to improve the customer’s perception of the company. This relationship is as important as the product or service that your company is offering.  

Having clarified this, we can now understand how logistics technology is capable of helping entrepreneurs be successful in a CRM strategy: by collecting and analyzing data. 

Thus, it is possible to offer more personalized service, improve sales and diminish public rejection. To tell the truth, a CRM strategy without technology becomes unviable. 


This resource makes it possible to exchange information between devices via Bluetooth. For example: the customer places his or her cell phone next to a device in a luncheonette and receives nutritional information about the sandwich being consumed.  

This is an innovative and accessible approach, but how does it improve logistics? Technology can be employed to collect information about the customer and, in this way, improve the company’s database, offering personalized service.  

In addition, with more information, it’s possible to elaborate new sales strategies, diminishing transport and product storage costs. This is because the exchange of data is more efficient than the filling out registration sheets, for example.  

This system based on Beacons can be used for payments, scheduling, information requests, complaints, etc. And it’s all accomplished in an automatic fashion.  


Another interesting example of technology is radio frequency identification (RFID). With this system, two objects can communicate by using radiophonic signals, exchanging information with each other.  

This is an evolution of the barcode reading system. In terms of logistics, it’s already used to control the stocks of medium to large firms, for example.  

Thus, each stored item receives an RFID label and, when it is consumed, its information is updated automatically. As a result, it’s possible to avoid human errors and make the purchasing department more dynamic.  

As we’ve seen in this article, the use of technology in logistics is fundamental to its achieving success in its activities and developing an efficient growth strategy.  

Another example of logistics technology is MyABCM’s software, which is used by firms around the world that wish to refine their activities. Worldwide leaders in transport and handling logistics use it to know exactly what their costs and results are by Product, Client, Route, Distribution Center, Project and Delivery Type (In-house or Outsourced Trucks), which makes it possible for their executives to make sound decisions. If you’re curious to know more about how it can help you, get in contact with us and let us answer any questions you may have! 


Financial software is critical to the smooth running of a large company. The lack of confidence in the numbers given by the tool indicates that something is not going well in the company. Choosing a system that does not deliver what it promises is frustrating, but there are several types of financial software with different features. 

Decision-making has no room for doubt or uncertainty in today’s competitive market. Thus, in this post, we will list the types of financial planning and management software, so you can see which one can provide greater productivity and agility to your business. Keep reading! 

Accounting and Finance Management 

You can count on this solution to follow up on accounting issues. With specific reports, you will have more control over your cash flows. The accounting and financial management software increases the speed and efficiency of your accounting department by automating your processes. 

Another important feature of an accounting system is to ensure your commitments to the Revenue Service, keeping your taxes up to date. 

Supply Chain Management 

Another type of financial system that can increase your competitiveness in the market is the supply chain management software. With this tool, your stock control will be automated, creating an economy with the reduction of human failures. 

Customer Relationship Management – CRM 

This software aims to manage the experience of the customer with your company, as well as his level of satisfaction and loyalty, according to his contacts with marketing, sales and customer service departments. 

It is important to know how your customer feels about your brand in order to turn him into an enthusiastic promoter of your company. 

Point of Sale Management 

An option for use in points of sale, this type of software is responsible for performing a specific and efficient control of a place of business. If your company works with direct sales to customers in various locations, you can control them with a system like this one. 

Integrated Management – ERP 

And finally, we have the type of software that brings together several features found in those mentioned above. The ERP (Enterprise Resource Planning) is a management system responsible for planning the company’s resources as a whole. 

Here, the main idea is to integrate, according to your needs, all your data and processes into just one tool that can meet all the demands of your business. 

Once you check out the existing solutions, you can think about how each of these types of financial software can aid your company’s routine with the purpose of increasing productivity and efficiency. However, depending on your demands, basic software like the ones mentioned may not be enough, and a more sophisticated solution is needed. Therefore, MyABCM is here to advice on this process. 

We still have one more important note for you: download our e-book and know the 7 greatest challenges of efficient cost reduction! 


Looking for process optimization is a necessary task. Therefore, the entrepreneur must have control of the most diverse areas of the company. Logistics costs should receive special attention from entrepreneurs, as this activity has a strategic role for the business. 

However, in the case of logistics, any change must be made with caution and always be based on previous studies. With that in mind, we’ll list some ways to improve the costs your company has with this operating division. Are you ready? Enjoy your reading! 

1.Eliminate idleness to reduce logistics costs 

It is not always easy to identify idleness, as it is not present only when a collaborator decides to fold his arms during his work day. Many processes become idle over time. 

This occurs when the process does not have a clear purpose. In some cases, the company has modernized, but has allowed departments that no longer have a defined task to continue operating and consuming resources. 

2.Automate processes as a solution 

In some companies, logistics costs are linked to the activities required after the sale of goods. These tasks can benefit a lot from automation. 

Product storage and delivery are two clear examples. The former can be fully mechanized, while the latter can gain efficiency by using geolocation devices. 

Of course, these changes must be made according to the company’s strategy, but the entrepreneur should not ignore the technological opportunities available. 

3.Map logistics processes 

The two previous topics cannot be applied without the company being aware of the logistics processes it uses. Logistics goes beyond the common concept of product delivery, and includes storage, packaging processing, distribution, etc. 

How can a businessman reduce logistics costs if he has not yet mapped them? The entrepreneur should have as a goal the mapping of all his processes - not only logistics -, as with this information he will have the confidence to make internal investments and improvements. 




4.Invest in continuous improvement 

Continuous improvement is the relentless quest for quality. It is easy to think of this concept when the company is developing a product, but many entrepreneurs do not apply it internally. 

There is no point in automating tasks if employees do not receive adequate training. It is also useless to monitor the processes if there is no one to analyze the data. It is important that the manager recognize possible operating weaknesses in order to solve them. This should come before any major investment, and also applies to small tasks. 

An example is stock. How many businesses do not spend more than they should when buying a material that will not be used soon? That requires a cost with storage. Improving the purchasing process is an example of continuous improvement applied to the logistics cost. 

As we have seen in this article, logistics costs can be reduced without affecting the quality of services or compromising the company’s activities. Managers should just be willing to access the largest source of information about their business: the organization itself. 

Did you like this article on logistics costs? Then visit our blog to have access to more tips on the business world!  


Businessmen from around the world work hard to make their companies more competitive and increasingly gain market space. In order to achieve this goal, many entrepreneurs don’t spare any effort and investments, which can create a problem arising from a poor budget process. 

The budget process is essential and must be applied in every sphere of a person’s financial life, from personal finances to the financial processes of a company. 

Do you want to know if your business is developing a good budget process? Read this article to the end! 

Budget process: far beyond spreadsheets 

It is very important to keep control over the company’s financial information, but even more important is to interpret them, as the data extracted from this analysis can indicate what direction the company needs to take. 

Therefore, the budget process uses the internal financial information together with the external scenario (economy, market growth, consumption behavior, etc.) and presents possibilities to the company. 

A good example is a concessionaire that wants to open a branch office in a mid-size city, and can rethink that decision when seeing the results of its budget process. The investment is very high and the market is slowing down, indicating a loss that could jeopardize the company’s future. 

Budget planning: how to do 

The first step is to have total control over the company’s financial information. In this case, it may be interesting to replace Excel spreadsheets by automated information control systems. 

By doing so, the risk of human error in managing such data is reduced, while the speed of information processing is accelerated. 

The second step is to have well-defined growth and expansion goals. With that, it is possible to draw different scenarios and adjust the company’s decisions to achieve them. 

In summary: If your company’s decisions are often made automatically and enthusiastically, it means you do not have a budget plan to follow and may be putting your company’s cash at risk. 

Budget planning: advantages 


The economy is cyclical and periods of growth alternate with recessions. The company will face problems when it does not have a plan of action to seize the moments of growth or to deal with periods of declining sales. 

In addition to providing this security, budget planning is also a strong ally to eliminate waste, as it imposes limits on each sector’s budget. This forces directors to seek creative and efficient ways to deal with resource constraints. 

Another advantage is the rational use of the company’s capital, avoiding expenses that are not supported in studies and do not have a strategic role in the development of the company. This considerably reduces amateur decision-making in the company, and therefore, it gains assertiveness. 

This type of internal strategy can be critical for a business to outperform its competitors, and now that you have understood more about the importance of the budget process, you can apply it in your company. 

If you liked this article, check out our blog and have access to texts about the business world. It’s a great way to keep updated! 


If we observe a company carefully, we will see that it looks like a living organism. Therefore, to understand what causes your problems, it may be wise to do some analyzes. An example of an effective “examination” is the zero-based budgeting (ZBB). 

It is likely that you already devote resources to develop an efficient budget, but the zero-based budgeting is different. Its methodology was designed to help large companies gain efficiency. 

If you are curious to understand more about this subject, it’s easy: just read this post! 

What is zero-based budgeting? 

When designing the budget plan, a company examines its past and tries to predict the future based on projections and studies. However, this logic can take into account isolated facts, which are not rules and, therefore, should be left out of the equation. 

An example: company X had a big expense with the purchase of raw material, because its main competitor had problems in its headquarters and it is temporarily inoperative, causing company X to sell more. 

The purchasing department should not rely on this rare fact to buy raw material, nor should HR take this information seriously when it comes to hiring. By developing a zero-based budget, the company can better analyze this information. 

Zero-based budgeting requires the detailing of expenses, justifying them and improving their analysis. But how? 

How to do the zero-based budgeting? 

The zero-based budgeting asks the manager to think strategically about spending. Therefore, the company will try to know the minimum investment needed to accomplish their tasks. 

Going back to the example of company X: what is the minimum investment in raw material needed to produce? With the detailing of operations, the director of this company ignored the period without competition and focused on the market’s reality experienced by the company. 


Each new expense will be organized according to its strategic importance to the company. By doing so, it will be possible for managers to understand their need. 

Remember that the zero-based budgeting requires the minimum necessary for the company to operate. The ideal solution is to apply this thinking to each board. Once this is done, a hierarchy of expenses is created. 

Set a cut 

The entrepreneur will define a line of cut, and what is not needed for the progress of tasks will be cut. For this reason, the entrepreneur will need to question the costs and justify them so that they remain in the company budget. 

Below the company’s survival line are the essential costs – that is, those that cannot be cut -, and above that line are the high priority, medium priority and low priority costs. 

Eliminate expenses 

After you find out where each cost is in the zero-based budget, it is easier for the company to know where to cut expenses, depending on its economic or growth scenario. 

Now that you know a little more about zero-based budgeting, it will be simpler to understand how your business is wasting resources. 

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