The Impact of Customer Value Management on Potential Profits - A Proposed Management Accounting Framework

Abeer Mohamed


Purpose- The purpose of this study is to propose a customer value management framework to improve the potential profits using the Management accounting techniques.

Design/methodology/approach- Based on the literature, this study identifies and adapts the most appropriate management accounting techniques to manage the customer value and hence improve potential profits. It also tests the perceptions of managers and management accountants of the Egyptian service sector concerning the relative merits of such a framework.

Findings- The most significant finding is that the current study accepted the revised model because it provided better fit indices compared with the fit indices of the hypothesized model. A key finding in the current study that has not been investigated in previous studies is that the customer value analysis has a positive and significant impact on companies’ profitability. The study also found that there is an indirect relationship between customer profitability analysis and companies’ profitability. Other factors in the proposed framework have significant positive relationships.

Originality/value- This paper contributes to management accounting literature by proposing a framework for managing customer value for the potential profits improvement purpose, using customer profitability analysis; customer value analysis; and value add-costing techniques together with the proposed sequences. It is also a practical contribution to improving the potential profits of the Egyptian service sector.

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Copyright (c) 2020 Abeer Mohamed

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International Journal of Accounting and Financial Reporting  ISSN 2162-3082

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