Reviewing customer accounting from Strategic Management Accounting

The main rationale on conducting customer profitability measurement and management is explained by Kaplan and Narayanan (2001) and is summarized in the following diagram:

In this diagram, I have used cognitive mapping technique to capture the relationship among all the key variables involved. + sign means an increase of A leads to an increase in B (ie A-- +ve-- > B) while a - sign means an increase of A leads to a decrease in B (ie A-- -ve --> B). Try to study Kaplan and Narayanan (2001) to develop a better understanding of the diagram. I encourage you to also try to refine the diagram based on your own understanding of the topic.  The diagram is a very crude cognitive map for that.

To further review customer accounting from Strategic Management Accounting (SMA) perspective, I think Ward (1993; chapter 6) is a good one. However, due to the rich information provided, it takes some effort to study though it is effort well spent. Then, you should read Bhimani et al. (2008; Chapter 12) which is a brief introductory reference on the topic. Next, you study Guilding and McManus (2002). There are also quite a number of brief articles provided by CIMA. Refereed articles on this topic are not difficult to find, see also Kaplan and Narayanan (2001) and Bates (2009). In this respect, writings on Customer Equity (e.g. Blattberg et al. (2001).) are also useful background readings.


References

1. Bates, K. (2009) "Does management accounting adequately support a customer-focused strategy?", Working paper, School of Accounting and Commercial Law, Victoria University of Wellington (url: http://www.acis.canterbury.ac.nz/NZMA2009/pdf/Bates_Does%20management%20acc%20support%20customer%20strategy.pdf)
2. Bhimani, A., Horngren,C.T., Datar, S.M. and Foster, G. (2008) Management and Cost Accounting, FT Prentice Hall.
3. Blattberg, R.C., Getz, G. and Thomas (2001) Customer Equity, Harvard Business School Press.
4. Guilding, C. and McManus, L. (2002) "the incidence, perceived merit and antecents of customer accounting: an exploratory note", Accounting, Organizations and Society 27, pp. 45-59
5. Kaplan, R.S. and Narayanan, V.G. (2001) "Customer Profitability Measurement and Management", May, Harvard Business School.
6. Ward, K. (1993) Strategic  Management Accounting, Butterworth Heinemann.