Customer profitability analysis allocates revenues and costs to certain segments of customers or individual customers, and results in the profitability calculations of individual groups. Customers profitability analysis is a modern management tool used to identify profitable and non-profitable customers in companies. There is a growing increase in the application of the customers profitability analysis model in business operations, especially in high-rise companies. Although the implementation of the model is very complex, the development of information technology enabled easier application and better implementation of this this strategic management accounting tool. In order to write down the work and prove the hypotheses raised, a sample of 64 medium and large companies based in the Republic of Croatia was investigated. The research sought to establish the introduction of managers to the concept of customer profitability analysis, the level of application of customer profitability analysis among Croatian companies and general attitudes of entrepreneurs and managers on customer profitability analysis as a strategic management accounting tool.