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Detailed Description

Contribution Margin Distribution

Of the available contribution margin calculated a percentage defined as the revenue rate to be retained by the company. The remaining percentage is available for distribution.

Each charge raised, manual or automatic is associated with a structure under the service branch in the company structure tree. Structures have an associated contribution margin split configuration which determines the split between different departments. Differing contribution margin splits apply depending on the number of months the service has been active. Three different ratios apply:

  • One ratio applies to the contract during the first months up to the length of the contract;
  • Another applies to charges associated with services out of contract;
  • A third ratio is configured that applies to services that have been renewed

Each department is set up with a manager who has a number of subordinates, or customer representatives. Each customer in the system is associated with a customer representative who is managing the customer. Of the contribution margin available to the department, the manager is allocated a percentage according to the configuration of the system. The customer representative who is assigned to manage the client is allocated the remainder.