Revenue centre
A revenue centre is a responsibility unit whose manager is primarily accountable for generating revenue rather than for a full profit or asset base. Sales volume, selling price, mix and customer quality can provide useful measures, depending on what the manager controls. Revenue targets should be balanced with constraints on discounts, customer credit and promised service. Maximising reported sales alone can harm profit or cash collection.
Worked example
A regional sales office has a $2 million revenue target but cannot control production costs. Report sales by volume and price, along with returns and overdue-customer indicators.
Common mistake
A manager can hit a revenue target using excessive discounts or weak-credit customers; revenue alone does not show desirable performance.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |