Cost-benefit analysis (CBA) is a systematic process used to evaluate the strengths and weaknesses of alternative actions or decisions. The purpose of a CBA is to determine which course of action adds the greatest net benefit compared to its associated costs. This process involves identifying the costs, which can include financial, time, and resource investments, and the benefits, such as increased revenue, saved time, or other tangible and intangible returns.

For example, a company considering whether to implement new software for automating its monthly financial close process, like Easy Month End, might conduct a CBA. The costs could include licensing fees, implementation time, and training for the finance team, while the benefits could include improved efficiency, reduced month-end close times, and fewer errors in balance sheet reconciliations. By quantifying these factors, the company can make an informed decision.

CBA is a critical concept within management accounting and strategic decision-making, ensuring resources are allocated efficiently to actions that maximize overall gain while minimizing waste. Among its related terms, concepts like 'Budget' and 'Accounts Payable' might often be part of such analyses, where tracking expenditures and anticipated benefits are crucial.