Contribution margin

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What it is

contribution_margin is what your revenue contributed in the period after the costs attributed to serving it — consolidated across the whole business, in your reporting currency. It is the figure that answers whether the revenue is worth having. Recurring revenue can grow while the margin behind it thins, and those two facts sit side by side on this object for exactly that reason. It is consolidated, not calculated from one place. Four different parts of your business already hold a view of margin, each accurate about its own slice and none of them complete. This figure reconciles them into one.

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How it is calculated

Measured, and consolidated in four stages. One. Each source figure is resolved to the entity it belongs to — a segment, a channel, a cohort, a deal — so that four views of the same business line up. An entity that cannot be resolved unambiguously is held in a queue and left out of the locked view rather than guessed at. Two. Each source is translated onto a common basis in your reporting currency: lifecycle margin is taken for the applicable stretch of time, deal margin is allocated across its term and the part inside the period taken, channel margin is rolled up from its cohorts, and cost to serve is the period’s allocation. Three. The reconciled views are cross-checked at three intersections — segment against channel, segment against cohort, and deal against what happened downstream. This is where concentration and asymmetry appear that no single source can see on its own. Four. Entity results are rolled up. The rollup is weighted by each entity’s share of your trailing twelve months of revenue, and those shares sum to one by construction, so no entity’s weight is a setting anyone chose. An entity whose consolidated margin differs from its own source figure by more than 2% is held out of the locked view until the difference is resolved, rather than locked in with the discrepancy inside it. An entity whose source data is below confidence is held out on the same basis. So a margin figure that is present is a reconciled one — and a period can consolidate over fewer entities than it holds.

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Where it comes from

Your billing and cost data, through the four sources above. Billing is required, as it is for every figure on this object. The cost side needs your finance system connected; without it the cost inputs are partial, and the figure is marked as such rather than published as though it were complete. Where the choice is made. This value is not open by default on any door. The choice happens when a reader grant that reaches it is issued or widened, when you subscribe to events, or when you turn the CRM property on. Whoever makes it is shown who becomes able to see the value, and their yes is recorded — holding a grant is no longer enough on its own. This value also sits at a higher audience ceiling than the revenue figures on the same object. The opt-in above is one thing and the ceiling is another: the opt-in decides that a choice is made and recorded on every door; the ceiling decides which grants may cover the value at all. A ceiling is not a block, and it is not a rule about your own staff. It governs where a value may travel and which grant may cover it — not who inside your company may look at a number your company owns. Nothing behind this figure is read by anyone outside your company. Unlike the revenue figures on this object, which come out of records your external accountants work from, margin is consolidated inside Beacon from your own cost and revenue inputs, and no outside party holds a standing read on any of it.

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How fresh it is

Consolidated monthly, on the fifth business day, and again at the quarter. The month-end view is fixed at that point and re-opened at the next monthly cycle. The quarter-end view is final and does not re-open. A third consolidation runs whenever your growth posture changes, because a posture change moves the envelope the figure is read against. Beacon’s margin calculation does not retune itself. The weighting basis, the reconciliation tolerance and the thresholds are recalibrated on a quarterly cycle by people — never between locks, and never by the system on its own. That is why this figure is measured rather than modelled: the arithmetic is fixed and written down, and the same inputs return the same figure.

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Currency and rounding

In your single reporting currency. Each source is translated onto that basis before anything is combined, at plan rate, so the consolidation is not mixing rates. It is an aggregate, so it travels with two facts rather than four — your reporting currency, and the kinds of anchor its components were pinned under, given as a list even when the list has one entry. It carries no single anchor date and no single billing currency, and that absence is stated rather than filled. Beacon applies no rounding of its own.

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What changes it

Revenue moving — any of the five movements changes what there is to earn margin on. Cost moving: cost to serve, acquisition cost, or the margin committed in new contracts. Mix moving, which is the one people miss — the same revenue and the same costs in a different arrangement of segments and channels produce a different consolidated figure, because the rollup is revenue-share weighted. Entities entering or leaving the locked view as reconciliation differences are resolved. A quarterly recalibration of the weighting basis or the tolerance.

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What it is not

• Not gross margin as your accountants report it. This consolidates the costs attributed to serving revenue across four operating views; it is not a statutory or accounting-policy figure and does not replace one.
• Not profit. Costs that are not attributed to serving revenue are outside it.
• Not a margin percentage. It is an amount; margin_contribution_index is the scaled reading, and it is not a percentage either.
• Not cost_to_serve. That is one account’s cost as a share of its revenue, and it is one of the four inputs here.
• Not a forecast. Beacon does hold a forward view of margin; it is a separate value and is not published on this object.