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In bpp textbook one of the benefit of cpa to company is an appreciation of the costs of servicing clients assist in negotiation with customers.
Sir, can explain to me what this benefit mean? Thank you in advance.I think this might be more of a P5 topic than a P3 one. However, consider two customers. Customer A places large orders and is non-demanding; Customer B places many small orders and is very fussy. Just looking at the contribution per unit sold, both customers might seem to be equally profitable. However, taking into account the extra bother and administration for Customer B might mean that dealing with Customer B is not as profitable – and might even be loss-making. It migth be better to get rid of that customer or at least to hike up the selling price they are charged.
Oh, just to reconfirm, it means that the result of analysis shows extra admin cost for customer B and this helps in negotiating a higher price with customer B?
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