Number top of that, ABC is able to

Number have relationships with all things in nature, thus making them supremely powerful symbolic expressions. People tends to used number to calculate in our daily activities, same goes to business (John McLeish, 1991). Customer has significant role in providing information that helps management of an organization to make informed decisions and in certain circumstances, providing meaningful financial numbers to an organization. Companies would determine cost, revenue as well as profitability contributed by each customer and uses this fruitful information to make strategic decisions. Customer profitability has direct impact on company’s pricing decision. Therefore, if an organization unable to identify customer profitability, pricing decision of the company will be affected. To date, although the role of accounting numbers in calculating customers are rare and insufficient to understand customers’ interest and anticipate their needs (Jeacle and Walsh, 2002; Mouritsen, 1997; Ogden, 1997; Vaivio, 1999). According to Robson (1992), although measure customers through paper-based inscriptions like accounting numbers has limited interaction with customers, but the results is not weak. It is strong instead because numbers gotten represent customers and customer performance, which allows comparison across different group of customers, evaluate customers’ satisfaction and calculate trends over a specific period of time (Robson, 1992).According to Ogden & Clarke (2005), accounting is considered as a form of measurement in term of customer orientation and performance. Customer profitability analysis (CPA) which is the application of activity-based costing (ABC) principle is being utilized in business as activity accounting technique to help the management to understand the cost and activities within an organisation (lecturer). It is designed to identify the leading activities take place within an organization, allocate cost to cost centres for each activity and therefore able to determine the cost of doing business with respective customers more precisely (Babad & Balachandran, 1993). According to Dalci (2010), customer cost information plays a significant role when comes to decision making. ABC eases the management decisions by determining products, activities and department which is inefficient and allocate more company’s resources such as human capital to areas which is more profitable. In term of cost, it helps the company to control from both individual and department level as well as identify unnecessary cost incurred. On top of that, ABC is able to provide valuable information such as true cost, marketing activities and customers (Stapleton et al, 2004; van Raaij, 2005; Cugini et al, 2007; Dalci et al, 2010). Accurate costing allows management of an organization to make better decision which improve the overall profitability of the business (van Raaij, 2003; Dalci et al, 2010). According to Ragins and Greco (2003), ABC method allows accurate cost reporting matched with work performed. Therefore, ease the management decisions about outsourcing, eliminating and streamlining activities. With the results calculated through ABC, management of an organization would be able to decide whether to continue to produce products which is not profitable or if they should continue the relationship with that group of customers (Pinnock, 1989, Dew and Salmon). Company’s management will therefore reallocate resources to ensure that the company would not acquire unnecessary raw materials which increase the cost of the company.Knowing customer long term strategies and intention is crucial for an organization as it would helps the company to predict product and services that customers tend to demand in future (Macdonald, 1995; Slater and Narver, 1998). Innes (1998) defined Strategic Management Accounting (SMA) as the provision of information to support the strategic decision of an organization, usually long term decision.  It was being described by (Drury 2002, Juras, 2014) as an external approach as well as internal approach. According to Shank & Govindarajan (1993), “external” refers to customers and suppliers which helps the company to examine the relationship between them by providing information. One of the well known example of SMA approach is target costing. Target costing is a customer-oriented technique which focus on managing cost during product’s planning and design phase (Book). Information such as price that customers are willing to pay and expected profit will be collected or gathered, then the company will minimize the cost of production to the target figure based on information and data collected earlier (lecturer). According to Shields and Young (1991), target costing overlaps extensively with life cycle costing. Life cycle costing helps the management to estimate the cost of the product over the whole life cycle and the demand of a particular product over a specific period of time (Drury, 2002). This allows management to estimates if the profit earned during the manufacturing phrase would be able cover the cost incurred. This provides an insight to management to allocate cost and resources throughout the whole life cycle so that waste and risk of storing obsolete products can be reduced (Drury, 2002).However, Jones and Dugdale (2001) stated that accounting which is number in nature brings limited information to an organization. The company may face difficulties when it comes to organization knowledge (Mouritsen, 1999; Vaivio, 1999). In fact, management should focus on both quantitative and qualitative factors instead of solely depends on quantitative which is numbers in nature when comes to decision making (Principles and Applications By Hugh Coombs, David Hobbs, Ellis Jenkins). According to Cuganesan (2008), non-financial metrics are considered as strong number in term of constructing customer. This indicates that both quantitative and qualitative sources are complement to each other. Rust (2000) stated that research on customer-specific cost has strong relationship with marketing in term of anticipating customer revenue. The existence of technology such as E-commerce and bar code as well as statistical analysis allows an organization to understand and interpret customers’ needs and therefore allows management to make informed decision on sales and marketing investment (Hitt & Frei, 2002). Cugini (2007) stated that customer satisfaction and customer profitability is significant in term of customer profitability. Hence, management accounting should take marketing management literature such as customer satisfaction, customer loyalty and customer retention into account (McManus and Guilding, 2008) instead of solely focus on profitability and sales volume. Customer satisfaction is crucial for an organization as it enhance the possibility of repeat purchase. Hence, management tends to use this as business performance evaluation tool to evaluate internally and externally. Customer satisfaction provides informations to management internally to allocate resources effectively as well as to monitor performance. It provides informations to external parties such as potential customers, investors and competitors to assess the organization’s quality. According to Fornell (1992), customer satisfaction indicates that customers are satisfied with the existing goods or services provided by the company and therefore, would lead to repeat purchase which resulted in customer loyalty. Existing loyal customers tend to be price inelastic (Garvin, 1988). They are willing to spend on the benefits that they would derived from the product, therefore increase in price does not affect their demand towards the product. This promised steady future cash flow to an organization in which the management would not need to worry about the return of investment on the production of such product as satisfied customers would frequently purchase the product in large volume (Reichheld and Sasser 1990). Furthermore, it would reduced cost such as marketing cost and failure cost as an organization does not need to allocate fund to acquire new customer and does not need to allocate cost and resources to rework on defective items and customer complain (Crosby, 1979)  Ngai (2005) stated that good relationship between business and customers create customer loyalty and retention and most importantly, profitability to an organization. Balanced scorecard is the recent contribution to strategic management accounting which develop and support the overall competitive strategy of a company (book). It takes both financial and non-financial measures as well as performance measurement into consideration. Balanced scorecard measure performance in four perspectives, which is financial, customer, internal business and learning and growth perspective. This indicates that business does not solely focus on number, which is financial perspective. It takes operational measure such as internal process, customer satisfaction and company’s innovation into account. According to Kaplan and Norton (1992), solely focus on financial measure does not improve the overall performance of the business in the long run because it is considered as lag indicators which summarize the outdated results in the past unlike non-financial measure which is the leading indicators of the future financial performance. It provides useful informations such as determining the customer and market segment in which the business is capable to compete with the existing resources and also which infrastructure to invest. This indicates that both financial and non-financial measure should complement each other in order to benefit the company in the long run. https://umei007-fall10.wikispaces.com/file/view/Kaplan%26Nortonbalanced+scorecard.pdfIn a nutshell, number plays an important role in our daily life same goes to business. It helps an organization to understand customers and therefore able to predict sales and future cost. However, it has proven that understand customer through number itself is insufficient. In order for an organization to success and take the lead in market, the company should understand customer from both quantitative and qualitative factors. Lack of understanding on qualitative factor such as customer satisfaction would cause the management to make incorrect decisions such as producing goods with inferior raw materials or hiring inexperienced staffs in order to reduce the cost of production and set lower selling price to attract customer with the perception that customer is willing to pay and demand the products with low price. However, this would compromised the quality of final goods which lead to customer dissatisfaction. This indicates that both financial and non-financial factors is equally important to an organisation. Solely focus on number (cost of production and selling price) without considering non-financial factor would not bring company to a successful path in the long run.