Revenue centre
Revenue centre is a responsibility centre whose manager is accountable for generating revenue but not for costs or the assets employed. A sales region or sales team is a typical example.
Also known asrevenue center
FrameworkResponsibility accounting
See it move
A waterfall chart opens at budgeted revenue of €2,400,000 and adds a single favourable bar of €150,000 to arrive at actual revenue of €2,550,000. The chart captures the only metric for which a revenue centre manager is held accountable: sales performance against target. The costs incurred to generate those sales and any capital employed fall entirely outside her scope of responsibility.
Check yourself
A regional sales office of a European clothing company meets its revenue target for the quarter but significantly overspends on client entertainment. Under which type of responsibility centre would the regional manager be evaluated on revenue alone — not held accountable for the entertainment overspend?