Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC): Applicable Methods for University Libraries?

Authors

  • Kate-Riin Kont PhD Student, Tallinn University Researcher, Academic Library of Tallinn University Head of Acquisitions, Tallinn University of Technology Library Tallinn, Estonia
  • Signe Jantson PhD Student, Tallinn University of Technology Researcher, Academic Library of Tallinn University Head of Bibliographic Department, Tallinn University of Technology Library Tallinn, Estonia

DOI:

https://doi.org/10.18438/B8GG8Z

Keywords:

cost accounting, costs, libraries

Abstract

Objective – This article provides an overview of how university libraries research and adapt new cost accounting models, such as “activity-based costing” (ABC) and “time-driven activity-based costing” (TDABC), focusing on the strengths and weaknesses of both methods to determine which of these two is suitable for application in university libraries.

Methods – This paper reviews and summarizes the literature on cost accounting and costing practices of university libraries. A brief overview of the history of cost accounting, costing, and time and motion studies in libraries is also provided. The ABC and the TDABC method, designed as a revised and easier version of the ABC by Kaplan and Anderson (Kaplan & Anderson 2004) at the beginning of the 21st century, as well as the adoption and adaptation of these methods by university libraries are described, and their strengths and weaknesses, as well as their suitability for university libraries, are analyzed.

Results – Cost accounting and costing studies in libraries have a long history, the first of these dating back to 1877. The development of cost accounting and time and motion studies can be seen as a natural evolution of techniques which were created to solve management problems. The ABC method is the best-known management accounting innovation of the last 20 years, and is already widely used in university libraries around the world. However, setting up an ABC system can be very costly, and the system needs to be regularly updated, which further increases its costs. The TDABC system can not only be implemented more quickly (and thus more cheaply), but also can be updated more easily than the traditional ABC, which makes the TDABC the more suitable method for university libraries.

Conclusion – Both methods are suitable for university libraries. However, the ABC method can only be implemented in collaboration with an accounting department. The TDABC method can be tested and implemented by separate departments, and thus can contribute to the provision of better and more effective library services at lower costs. However, the involvement of experts in costing and accounting is recommended.

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Author Biographies

Kate-Riin Kont, PhD Student, Tallinn University Researcher, Academic Library of Tallinn University Head of Acquisitions, Tallinn University of Technology Library Tallinn, Estonia

Kate-Riin Kont graduated from the Department of Librarianship and Information Science, Tallinn University in 1995; she earned an MA from the same department in 2004. Since 2009, she has been involved in doctoral studies at Tallinn University. She has worked as an librarian and senior librarian in Academic Library of Tallinn University (1989-2003), as an information specialist at the Centre of Information Services for MPs of the National Library of Estonia (2003-2006) and as a leading specialist in the Research and Development Centre of the National Library of Estonia (2006-2008). Currently she works as researcher in Academic Library of Tallinn University as well as Head of the Acquisitions Department of the Tallinn University of Technology Library.

Signe Jantson, PhD Student, Tallinn University of Technology Researcher, Academic Library of Tallinn University Head of Bibliographic Department, Tallinn University of Technology Library Tallinn, Estonia

Signe Jantson graduated from the Department of Librarianship and Information Science, Tallinn University in 1997; she earned an MA from the same department in 2004. Since 2005, she has been involved in doctoral studies at Tallinn University and since 2009 in doctoral studies at Tallinn University of Technology, in School of Economics and Business Administration. She has worked as an librarian Academic Library of Tallinn University (1995-1998) and as a bibliographer in the National Library of Estonia (1998-2004). Currently she works as researcher in Academic Library of Tallinn University as well as Head of the Bibliographic Department of the Tallinn University of Technology Library.

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Published

2011-12-15

How to Cite

Kont, K.-R., & Jantson, S. (2011). Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC): Applicable Methods for University Libraries?. Evidence Based Library and Information Practice, 6(4), 107–119. https://doi.org/10.18438/B8GG8Z

Issue

Section

Research Articles

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