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Customer accounting in a telecommunication enterprise – A case study of a large Finnish subscription-based telecommunication business
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School of Business |
Bachelor's thesis
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en
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21+4
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In today's highly competitive business environment, companies increasingly use advanced customer accounting (CA) methods as essential tools for strategic management. Both management accounting and marketing scholars share this growing interest in CA techniques. Customer Profitability (CP) is considered a vital component of strategic management accounting, signifying a shift towards a marketing-oriented approach in management accounting. However, a separation exists between management accounting and marketing, limiting their collaboration and interaction (Kohsuke, 2020).
Academic research exploring how firms use customer accounting information in practice is quite limited (Kohsuke, 2020). This study's primary objective is to investigate which customer accounting techniques a specific case company employs, identify potential challenges, and examine the involvement of the marketing and accounting departments in this process.
The qualitative research methodology used here relies on data gathered from interviews with key personnel from a significant Finnish telecommunications company, including the Group Controller, Senior Development Manager, and Customer Value Lead.
The research questions guiding this study are as follows: 1. What different customer accounting techniques the company uses? 2. What have been the challenges according to customer accounting? And 3. How are the marketing and financial departments involved with customer accounting?
While the empirical evidence presented in this article is primarily descriptive in nature, the insights drawn from the case study have practical implications for managers. They can inform future academic research in the field of customer accounting. Based on the empirical data, the case company does employ specific customer accounting techniques, such as Customer Profitability analysis at the segment or individual customer level. However, a significant challenge lies in simplifying the complex customer accounting information while ensuring its accuracy to support strategic decision-making. The interviews revealed limited communication between the financial and marketing departments, potentially leading to duplicated calculations and a lack of shared understanding regarding key customer accounting measurements, such as customer lifetime value (CLV).