Profit and Loss Statements In Call Centre

Profit and Loss Statements In Call Centre

I manage a call centre but want to learn how to manage the profit and loss statement for a call centre.

Does anyone have a template of P&L that can share with me and provide insight on the key sections to look at ?

Question asked by sahara10

KPIs to Look For

I don’t have a template to hand but I was a finance guy before I went into operations so can give you some pointers.

Unfortunately, historically CCs have been viewed as cost centres rather than profit centres so the thinking on costs is much better thought through than on revenues.

However, on the revenue side I would expect to see lifetime value of sales made and of cancelling customers saved. The valuation is always an interesting conversation with accounting colleagues and neither the scope of costs to be included or their valuation is black and white.

On the cost side, CC accounts are normally pretty dull – payroll costs, building costs, some technology and management overhead.

Therefore, it is more informative to look at management accounts rather than financial accounts ie looking at the underlying KPIs rather than the costs themselves. Any KPI can be attributed a unit cost which allows you to look at the sensitivity.

The KPIs to look at would be

• calls
• call rate per customer
• number of customers
• outbound calls
• productivity, specifically pulling out talk time and unproductive time, sickness etc
• handling time
• attrition
• credits given

While understanding the profit statement is a key leadership task the difference between weak and stellar leadership is guiding the operation without referring to the finances and KPIs.

The team has to feel that the focus is on the customer and delivering a great customer experience – cost variances are normally an indicator the operation is sick but tackling the cost itself will not make the operation better.

With thanks to Dougie

How is Revenue Allocated

However, how is revenue allocated to the Contact Centre’s P&L ?

With thanks to sahara10

It Will Vary

It will vary from operation to operation.

In the simplest example a one-off sale by a call centre agent would be allocated to the call centre less sales and product costs. If it were an ongoing revenue stream then some proxy of lifetime value would be used.

Requiring even more thought is how to allocate the “savings” made from retaining a customer; often called turnaround.

The best thing to do is to talk to your FD and working through examples in your own operation which will, hopefully, make more sense.

With thanks to Dougie

BPO P&L Management

I am assuming you work in an Outsourced Contact Center since you’re interested in P&L management and not budget management.

Managing the P&L in an outsourced environment starts of with understanding the pricing and cost models of the program/s or account/s that you are managing as these are going to be the basis for the program’s P&L

When Business Development drafted a proposal to your client, they made assumptions on costs and imputed a desired margin to come up with a pricing proposal that could either be hourly or FTE based.

Ask your superior for the P&L model for the account/s you’re managing.

Much as I would like to discuss this matter in detail, it is a bit more complex to discuss in text format alone.

I will soon come up with a series of videos in YouTube that will focus on P&L management in a BPO environment.

Please watch out for it.

With thanks to Annie

Author: Jonty Pearce