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ACCA Applied Knowledge · Business and Technology · The relationship between accounting and other business functions

A business uses a customer relationship management (CRM) system that records each customer's purchases, complaints and payment history. Which use of this data by the accounting function would be MOST valuable for assessing customer profitability?

The most valuable use is combining each customer's sales revenue with the costs of serving them, such as returns, discounts and support. This reveals true customer profitability, whereas email activity or length of relationship ignore costs and do not show whether a customer adds profit.

  1. ACombining sales revenue with the cost of servicing, returns and discounts for each customerCorrect
  2. BCounting the number of marketing emails each customer opened
  3. CRanking customers by the length of their relationship with the business only
  4. DComparing customer names with the employee payroll list

Explanation

Customer profitability analysis requires revenue less the costs to serve, including returns, discounts and support. Email counts and tenure alone ignore cost, so they say nothing about profit. Comparing names with payroll is a fraud check, not a profitability analysis.

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