The role of activity-based costing systems in enhancing the competitiveness of small and medium-sized enterprises (SMEs)

Abstract

In contemporary Thai society, small and medium-sized enterprises (SMEs) face increasingly fierce competition and rapid economic changes. Businesses need to adapt by adopting technology and developing management systems related to cost control and analysis to enhance their competitiveness. SMEs play a vital role in supporting Thailand's economic stability by generating income, creating jobs, and improving the quality of life for its citizens. SME owners should prioritize reducing the costs of non-value-adding activities while simultaneously improving the quality of their products and services. Activity-Based Costing (ABC) is a crucial tool for SMEs to improve their competitiveness by shifting from traditional costing to calculating costs based on actual activities. This reveals the true cost of goods and services, reduces hidden costs, and decreases the costs of non-value-adding activities, leading to more appropriate pricing. This concept can be integrated through the ABC-S (Activity-Based Costing for Strategy) model, which systematically explains the linkages from activity analysis leading to accurate budgeting, efficient cost control, and ultimately creating a strategic advantage. This process demonstrates that using ABC not only helps SMEs "see true costs" but also enables them to "control costs and make accurate decisions." And to compete sustainably,” this is considered important knowledge that helps enhance the potential and competitiveness of small businesses in the long term.