Český finanční a účetní časopis 2013(4):172-182 | DOI: 10.18267/j.cfuc.365

Customer´s Profitability and Payment Conditions of a Trade Relation

Artur Rutkouski

Ing. Artur Rutkouski - doktorand; Katedra manažerského účetnictví, Fakulta financí a účetnictví, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3; <xruta01@vse.cz>.

The article elaborates the possibilities of practical usage of a traditional model of Customer profitability analysis and its extension by costs of capital connected with a shorter or longer interval receivables´ coverage or with additional sources linked in inventories required by a concrete customer need. On a base of empirical research it investigates correlations between three groups of variables - between maturity of receivables and customers´ profitability, between unit price and product category and between level of customers´ turnover and interval of maturity rendered to these customers. In empirical part it concludes the investigated company takes into consideration in relations to its customer portfolio their profitability as well as contribution to its financial position. In closing general evaluation of the whole project it concludes that - despite the Customer Profitability Analysis information contribution importance - its outcomes cannot be perceived unambiguously - for example by this way a company should dispose customers whose contribution to profitability and to financial position is low or even negative. Also in these cases it is necessary to evaluate the customers´ benefit to a company development in the context of strategic horizon which can be apparent better from the subsequent Customer Life Time Value model.

Keywords: Correlation analysis of customer portfolio; Customer profitability; Contribution to the financial position.

JEL classification: M41

Published: December 1, 2013  Show citation