Fix the comparison boundary before calculating
Records and assumptions to align
- Define booked, cancelled, no-show, refilled, rescheduled and completed appointments consistently. (not complete)
- Use retained contribution per completed appointment after avoidable direct cost. (not complete)
- Separate deposits/fees billed, collected, refunded and recognised under the business’s policy. (not complete)
- Record whether the freed slot was refilled and the contribution actually recovered. (not complete)
- Keep outreach, rework and idle paid-time costs visible. (not complete)
| Field | Required unit | Preferred evidence |
|---|---|---|
| appointment contribution | CU/appointment | completed appointment cohort |
| contribution from refilled slot | CU/slot | booking record or labelled sensitivity |
| economically retained cancellation amount | CU/event | payment/refund record and current policy |
Build a reproducible scenario
unrecovered contribution = appointment contribution + incremental recovery cost - contribution from refilled slot - economically retained cancellation amount
- appointment contribution
- Net service revenue less avoidable direct delivery cost (CU/appointment) — completed appointment cohort
- contribution from refilled slot
- Actual or scenario contribution from replacement work in the same capacity slot (CU/slot) — booking record or labelled sensitivity
- economically retained cancellation amount
- Amount retained after refunds, collection cost and applicable treatment (CU/event) — payment/refund record and current policy
Do not subtract both a retained deposit and a fee if they are the same cash amount. A rescheduled appointment is not recovered capacity if it displaces another booking later.
Fictional missed 90-minute appointment
A 140 CU booking has 35 CU avoidable direct cost and 10 CU recovery administration.
| Case | Declared inputs | Substitution | Result |
|---|---|---|---|
| No recovery | 140 revenue; 35 avoidable cost; 10 recovery administration | (140 - 35) + 10 | 115 CU unrecovered |
| 40 CU retained amount | 105 appointment contribution; 10 recovery; 40 retained | 105 + 10 - 40 | 75 CU unrecovered |
| Waitlist refill | 105 contribution; 10 recovery; 90 replacement contribution | 105 + 10 - 90 | 25 CU unrecovered |
Stress-test the uncertain inputs
| Variable | Lower case | Higher case | What it tests |
|---|---|---|---|
| Refill contribution | No refill | Completed replacement booking | Tests recoverable capacity |
| Retained amount | Refunded/uncollected | Economically retained | Tests cash recovery without prescribing policy |
| Reschedule displacement | Uses otherwise idle slot | Displaces another booking | Tests whether rescheduling truly recovers contribution |
Stop and review when
- Booked price is treated as contribution without deducting avoidable costs. (not complete)
- Collected cash and earned revenue are conflated. (not complete)
- A refill or retention effect is assumed rather than observed/sensitised. (not complete)
Turn the scenario into a controlled decision
- Reconcile the baseline to current records and name the evidence owner.
- Run the base case, then change one uncertain input at a time.
- Record the chosen response, approval limit, review date and stop trigger.
- Compare actual results with the original boundary before reusing the assumption.
Avoid these mistakes
- Multiplying the full price by no-show count. (not complete)
- Counting a rescheduled appointment as full recovery when it consumes another scarce slot. (not complete)
- Using the calculation to justify a legal or customer-policy conclusion. (not complete)
Questions to resolve before approval
- What cancellation fee should a business charge?
- This framework does not recommend a fee. Use the economic view alongside customer, contract, legal and operational review.
- Is a retained deposit pure profit?
- Not necessarily. Consider refunds, collection/payment cost, tax/accounting treatment and recovery effort under the stated boundary.
Methodology and source boundary
- Downtime Cost methodology — Margin101: Product-owned idle-capacity and recoverable-contribution boundary.
- Refund Cash & Profit Impact methodology — Margin101: Product-owned refund, cash and economic-impact separation.
- Occupancy Break-even methodology — Margin101: Product-owned appointment-capacity boundary.