Revenue is a key concept in the activities of the enterprise. The difference between revenue and sales Retail turnover and sales revenue

Hello! In this article, we will talk about related, but not identical concepts: revenue, income and profit.

Today you will learn:

1. What is included in the revenue of the enterprise;
2. What is the income and profit of the company formed from;
3. What are the main differences between these concepts.

What is revenue

Revenue - earnings from the direct activities of the company (from the sale of products or services). The concept of revenue is found exclusively in business and entrepreneurship.

Revenue characterizes the overall performance of the enterprise. It is revenue, not income, that is reflected in accounting.

There are several ways to account for revenue in an enterprise.

1. The cash method defines revenue as real money received by the seller for the provision of services or the sale of goods. That is, when providing installments, the entrepreneur will receive proceeds only after the actual payment.
2. Another way of accounting is accrual. Revenue from it is recognized at the time the contract is signed or the buyer receives the goods, even if the actual payment occurs later. However, advance payments are not included in such revenue.

Types of revenue

Revenue in an organization is:

1. Gross- the total payment received for the work (or product).
2. Pure- applied in . From gross revenue, indirect taxes (), duties, and so on are deducted.

The company's total revenue is made up of:

• Proceeds from core activities;
• Investment proceeds (sales of securities);
• Financial earnings.

What is income

The definition of the word "income" is not at all identical to the term "revenue", as some entrepreneurs mistakenly believe.

Income - the sum of all the money earned by the enterprise through its activities. This is an increase in the economic benefit of the enterprise by increasing the capital of the company by the inflow of assets.

A detailed interpretation of the ways of generating income and their classification are contained in the Accounting Regulation "Income of organizations".

If cash proceeds are funds received by the company's budget in the course of its core activities, then income also includes other sources of funds (sale of shares, receiving interest on a deposit, and so on).

In practice, enterprises often carry out diverse activities and, accordingly, have various channels for generating income.

Income - the overall benefit of the company, the result of its work. This is the amount that increases the capital of the organization.

Sometimes the income is equal in size to the net revenue of the organization, but most often companies have several types of income, and there can be only one revenue.

Income is found not only in entrepreneurship, but also in the daily life of a private person who is not engaged in business. For example: scholarship, pension, salary.

Receipt of funds outside the scope of doing business will be referred to as income.

The main differences between revenue and income are given in the table:

Revenue	Income
The result of the main activity	The result of both main and auxiliary activities (sale of shares, interest on a bank deposit)
Occurs only as a result of conducting commercial activities	Allowed even for unemployed citizens (allowances, scholarships)
Calculated from the funds received as a result of the work of the company	Equal to revenue minus expenses
Cannot be less than zero	Let's go negative

What is profit

Profit is the difference between total income and total expenses (including taxes). That is, this is the same amount that in everyday life could be safely put in a piggy bank.

In an unfavorable situation, and even with big income profit can be zero, or even go negative.

The main profit of the company is formed from the profit and loss received from all areas of work.

Science economics identifies several main sources of profit:

• Innovative work of the company;
• Entrepreneur's skills to orient in the economic situation;
• Application and capital in production;
• The company's monopoly in the market.

Types of profit

Profit is divided into categories:

1. Accounting. Used in bookkeeping. On its basis, accounting reports are formed, taxes are calculated. Explicit, reasonable costs are subtracted from total revenue to determine accounting profit.
2. Economic (surplus profit). A more objective indicator of profit, since when calculating it, all economic costs incurred in the work process are taken into account.
3. Arithmetic. Gross income minus miscellaneous costs.
4. Normal. Necessary income in the work of the company. Its value depends on the lost profit.
5. Household. Equal to the sum of normal and economic profits. Based on it, decisions are made on the use of the profit received by the enterprise. Similar to accounting, but calculated differently.

Gross and net profit

There is also a division of profit into gross and net. In the first case, only the costs associated with the workflow are taken into account, in the second, all possible costs are taken into account.

For example, the formula by which gross profit in trade is calculated is the selling price of a product minus its cost.

Gross profit is most often determined separately for each type of activity, if the enterprise operates in several directions.

Gross profit is used when analyzing the areas of work (the share of profit from which activity is greater), when determining the company's creditworthiness by the bank.

Gross profit, from which all costs have been deducted ( , loan interest and so on), forms a net profit. From it are accrued to shareholders and owners of the enterprise. And it is the net profit that is reflected in and is the main indicator of the business.

EBIT and EBITDA

Sometimes, instead of the understandable word "profit", entrepreneurs meet such mysterious reductions as EBIT or EBITDA. They are used to evaluate the performance of a business when the compared objects operate in different countries ah or are subject to different taxes. Otherwise, these indicators are also called cleared profit.

EBIT represents profit in the form in which it was before taxes and various interest. It was decided to single out such an indicator in a separate category, since it is located somewhere between gross and net profit.

EBITDA is nothing more than profit before taxes, interest and depreciation. It is used exclusively to evaluate the business, its characteristics. It is not used in domestic accounting. for commercial equipment.

Thus, income is the funds received by the entrepreneur, which he can later spend at his own discretion. Profit - the balance of funds minus all expenses.

Both income and profit can be predicted if you take into account revenue for past periods of work, fixed and variable costs.

The differences between profit and revenue are as follows:

The line between concepts may be unclear for an ordinary employee, it does not matter to him how revenue differs from profit, but for an accountant there is still a difference.

Many people do not fully understand what a company's profit and its revenue are, and what is the difference between these concepts, and if you look deeper, each of these terms has its own subterms: net profit and EBITDA, gross revenue.

Employees of economic specialties (state statistics officers or accountants), when publishing indicators and indicators, imply clearly defined definitions of each term.

They are stipulated in legislative acts, full awareness of which is mandatory for such employees. But since the concepts of revenue and profitability are in the sphere of interests of numerous non-professionals, an understanding of the essence of the concepts discussed will be useful.

Revenue- the amount of money or other equivalents that the enterprise receives for a specified period of time of its operation, for the most part due to the sale of products or services.

Distinguish between revenue and income: the latter represents the revenue (turnover) minus the cost (or purchase price) of the product or service.

Revenue does not include increases in capital due to an increase in the value of the company's assets due to any factor. In the case of calculating the revenue of charitable organizations, it is calculated as the total amount of charitable cash injections received.

Revenue Formula

The revenue formula can be represented as follows:

Revenue = cost (or purchase price) + value added
Revenue = Realized Value * Number of Units Sold

According to the Regulation on Accounting under the number 9/99, revenue recognition occurs subject to the mandatory presence of the following criteria:

1. the company has the right to receive this proceeds (which follows from the subject contract);
2. total revenue can be determined;
3. there is confidence that that as a result of a certain transaction, an increase in the financial benefits of the enterprise will follow;
4. ownership(use and disposal, ownership) of the goods (products) passes from the enterprise to the client or the customer has accepted the work (service provided);
5. transaction costs, can be determined.

The total revenue of the enterprise for the reporting period consists of:

1. Operating revenue- the amount of money or other assets in monetary terms received or to be received in the future as a result of the sale of products, the provision of services and services at prices, tariffs in accordance with contracts.
2. Revenue from investment activity .
3. Revenue from financial activities companies.

The last two items are:

• financial receipts from shares in the capital of other companies, dividends, bonds and other securities;
• financial receipts from leasing;
• additional financial receipts due to the exchange rate delta on foreign currency accounts, transactions in foreign currencies;
• financial receipts from the revaluation of funds placed in securities, subsidiaries, and so on;
• royalties and capital transfers received;
• other financial receipts from financial activities.

Total revenue is made up of revenue from the above three areas, but mainly it consists of revenue from core activities, which, in general, is the whole point of the company's existence.

Profit- net income from business activities, reflected in cash, which is the delta of total income and total costs of the company.

Profit (or loss) of the company is a defining indicator that demonstrates financial results.

The Regulation on Accounting under the number 4/99 sets out the process of profit formation and presents 5 of its main indicators:

• Pure(retained earnings);
• Profit from operating activities;
• Realization profit- delta of gross profit and distribution costs;
• Profit (or loss) before tax- is calculated according to the following scheme: operating income is added to the operating income and operating costs are subtracted, non-operating income is added to this total and non-operating costs are subtracted;
• — is equal to the delta of sales proceeds (net of VAT, excise duties, and other obligatory payments) and the cost of goods sold (in the trade sector, the cost is equal to the purchase cost of the goods).

Profit formula

The main profit of the company consists of:

1) Profit (or loss) of the main activity- the fiscal result coming from the main activity of the company, it can proceed in the form of any forms and varieties, ratified in the company's charter and not contradicting legislative acts.

The fiscal result is formed separately according to each type of company activity related to the sale of products, the performance of work, the provision of services.

It is calculated as a delta of proceeds from the sale of products at current prices and the costs of their manufacture and sale.

Pr \u003d Bp - C / s ,

where bp- proceeds from the sale;
S/s- cost (expenses for production and sale).

Revenue is calculated excluding VAT and excise payments, which, being indirect taxes, go to the state budget. It also does not include allowances (discounts) provided to dealer and supply companies that participate in the sale of goods.

Export companies, when crediting profits, do not include export duties that go to the country's budget.

2) Profit (or loss) from ancillary activities- this includes the sale of assets, operating, non-operating and extraordinary income and expenses.

Companies can make a profit or loss that is not related to the sale of goods, works and services. It also includes profit or loss from other sales, namely from the sale of the property of the enterprise.

For example, a company may sell fixed assets or funds, intangible assets, materials, WIP, securities and so on.

In addition to profits and losses from other sales (from the sale of property), enterprises still receive non-operating financial results that are not related to either the sale of goods or the sale of property.

The difference between profit and revenue

1. Count. Revenue, by definition, cannot be less than or equal to zero; if it is lower, then it means its complete absence. Unlike revenue, profit can be both positive and negative.
2. Structure. To calculate revenue, it is sufficient to determine the amount of all funds that an individual or legal entity received for a certain period of time. In the case of calculating profits, everything is much more complicated, because first you need to know the sum of all the funds received and the costs.
3. real expression. In the case of revenue, it may be "absentee", for example, if the company allows a deferred payment, allowing its customers to pay a little later. In the case of profit, such a calculation is inappropriate, because. it is calculated only upon the fact of settlement, when the money is either received in hand or in a bank account.
4. Expression. Revenue is a single-digit value, because it consists of the amount of income. In turn, profit can have several meanings - whether it is gross (total) or net (with mandatory payments paid).

Thus, it is necessary to distinguish between the concepts of revenue and profit, since they have different semantic and economic meanings.

We recently conducted a study and found that more than 50% of our clients in small and micro businesses do their own bookkeeping. The advantages are obvious - savings. There may not be any cons if the entrepreneur understands financial and accounting. Sometimes this is critical.

Here is a real-life case that illustrates well the importance of financial literacy as an entrepreneur. Once upon filling balance sheet the owner of the business indicated the balance Money on the account, the cost of goods, the amount of accounts receivable and accounts payable, and in fixed assets he wrote with the words: "Nissan".

Do you think that the entrepreneur's assets and liabilities converged, and what would the tax authority say about this?

Confusion in terms can lead to overpayments or arrears, which threaten tax penalties. Everyone should understand well and be able to distinguish from each other the main indicators of financial activity: revenue, profit, income, turnover and turnover.

Revenue, income and gross margin

Revenue- the amount of money received from the sale of goods, works, services. It can be determined by the “on shipment” method, that is, at the time of actual shipment of the goods or the provision of services, or it can be by the “cash” method, that is, at the time of receipt of payment. In addition to funds received directly from the sale of goods and services, it may also include income from the sale of valuable assets and other receipts.

In accordance with the regulation on accounting « income an organization recognizes an increase in economic benefits as a result of the receipt of assets (cash, other property) and (or) the repayment of liabilities, leading to an increase in the capital of this organization, with the exception of contributions from participants (property owners)”.

Revenue is an indicator of financial well-being and the starting point for calculating the profit of an enterprise. It can be zero or positive, but never negative.

The concepts of "revenue" and "turnover" are generally identical. At the same time, “turnover” can often be used to refer to the non-cash turnover of the company, that is, the receipt of funds to the current account for goods, works and services sold.

In any case, both revenue, and income, and turnover are "gross" characteristics that do not take into account the costs (expenses) of the company.

Gross profit equal to the difference between revenue and expenses (costs) for the main activity (cost of goods or services sold). The financial result, which takes into account expenses in all areas of the company's activities, is called net profit (positive financial result) or net loss (negative).

Company turnover, trade turnover and revenue

Often confusion arises in the concepts of "turnover" and "turnover". We have already found out that turnover companies are the money that an enterprise has, this term refers to the economy. Turnover is a concept from the field of accounting, it denotes the amount of funds received from the sale of goods or services.

Trade turnover should be distinguished from proceeds - in addition to direct income from trade, it may include other types of income and income from the sale of property. Thus, the revenue can be either greater than the turnover, or equal to it.

In addition, it is important whether you calculate revenue on an accrual basis or on a cash basis. As mentioned earlier, in the first case, income or expenses are taken into account in the period to which they relate, in the second - when they are directly paid. If the sale is made in installments or deferred payment, then, in the case of cash settlement, revenue and turnover may also differ.

The difference between profit and turnover

If there is nothing wrong with calling revenue turnover, then it is very important to distinguish profit from turnover, for example, in order not to overpay income tax.

Thus, the concept of "turnover" characterizes how much money the company has in principle, and profit is how much money the company can invest in its own development.

The difference between expense and loss

Expenses are all the money a company spends to produce and sell its product. These include material costs, salaries and other payments to employees, the cost of repairing equipment and premises, rent, taxes.

When expenses exceed the income of the company, there is a loss.

Every entrepreneur should know what is the income and profit of the enterprise, as well as how they differ from revenue.

Profit and income are the main financial indicators economic activity various organizations, regardless of the form of ownership. They can give an idea of ​​the overall profitability of the enterprise.

The costs of social and industrial development of the firm must be financed from profits. Funding source state budget considered corporate income tax.

What is revenue (turnover)

Proceeds - funds received (proceeded) by an enterprise, firm, entrepreneur from the sale of goods and services, sales proceeds. That is, it is all sum of money, which turned out after the sale of the goods.

Example of revenue (turnover), Petya sold 100 phones for 10,000 rubles. The revenue will be 100 * 10,000 = 1,000,000 rubles.

Revenue from the sale of certain products is divided into two main types - net and gross:

• Under Net Revenue means the amount of money after all kinds of deductions, taxes, discounts and the cost of the returned goods.
• Gross revenue- is the total amount of cash receipts after the sale of certain products or services.

Income \u003d is revenue (turnover) - the cost price (or purchase price) of goods or services. Taxes are also deducted from this amount. Material costs are the funds that were spent on the purchase of products or the necessary equipment. Such costs include a variety of social contributions. extradition wages has nothing to do with this category.

Income Example, let's say the cost of Petya's phones is 5000 rubles. Only 100 pieces, which he sold for 10,000 rubles each. Then income \u003d 100 * (10,000 - 5,000) \u003d 500,000 rubles.

Labor costs and profits are the main components of the income of a particular enterprise. The market value of the goods and the general market conditions have a direct impact on the level of income of the organization. Possible income from individuals and legal entities do not belong to the income side of the company.

If the income is subject to tax payments, then after their deduction there remains an amount that includes the following elements:

• insurance and investment income. These are the amounts received in the course of investment activities and the costs of insurance premiums.
• Consumer funds whose activities require spending on the social sphere.

Income can be marginal, total and average.

• marginal revenue is the difference by which the total income of the organization changes after the sale of a certain unit of goods. Demonstrates the overall payback of the company.
• Total income- this is the final result of the economic activity of the company, the difference between the cost of goods and production costs.
• Average income received after the sale of one unit of goods. It is equal to the price of a particular sold product.

Experts also distinguish the concept of other income. These include a variety of penalties, interest for placing a deposit.

What is profit

Profit is the difference between costs and revenues, where the latter are an indicator of financial activity.

Profit example, Petya's income from the sale of phones amounted to 500,000 rubles. But you still need to pay taxes, pay the salary of the manager, pay the rent, etc.

Maximizing profits has always been one of the main goals of a successful businessman. It is considered the most important estimated generalizing indicator of the activity of a particular company.

This concept includes the following main components:

• Profit from the sale of property and sale material assets.
• Funds that were received from additional (non-core) activities of the organization. This refers to securities, dividends, funds from the rental of real estate.
• The difference between the funds that were received from the sale of a certain product and its present value.

If it was found that the profit of the enterprise is zero, the costs can be considered the result of such economic activity. The limiting indicator of this concept can be obtained by selling an additional copy of the product.

There are several main functions of the profit of the enterprise:

• Provides funds for the development of the company.
• Forms taxes on the profits of commercial enterprises.
• Shows the final economic result of the activities of a conventional enterprise.

For productive profit management, experts recommend taking into account its marginal indicator, which you need to focus on. Some heads of firms actively practice lowering the price policy. But this should not be exacerbated. With a large demand for goods, the profitability of the enterprise as a whole can drop catastrophically.

Experts advise offering their customers inexpensive analogues of goods and services that are considered the most in demand. Such measures will help maintain the attractiveness of products and the normal price category.

This financial indicator has several classifications. As a result of economic activity:

• Minimum allowable and maximum possible, which occurs at minimum cost and maximum profit.
• Regulatory- This is the standard minimum indicator provided by the enterprise.
• under-received- a loss that was formed due to the fact that one of the participants in the transaction violated its obligations.

Profits may or may not be taxed. It is differentiated into economic and accounting, depending on the costs. The first is the difference between accounting profit and additional, forced expenses.

As for the second option, it is positioned as the difference between the costs incurred and the income of the enterprise.

Gross profit is the difference between the total income of a particular organization and the amount of costs. Net income can be calculated by subtracting all related expenses from gross income.

About EBIT and EBITDA earnings

These are two more types of profit, which should be separately emphasized.

Profit EBIT is positioned as an intermediate value between gross and net indicators. Some believe that this is operating profit and are mistaken. This concept can also include non-operating profit. The amount of EBIT earnings can be calculated from the sum of profit and loss before payment tax contributions. This indicator must be positive.

The value of profit directly depends on the depreciation rate and how it is calculated.

EBITDA is earnings before interest, depreciation and taxes, showing only cash inflows. This metric is calculated based on financial reporting This or that organization and is the main indicator of how profitable the company's activities are as a whole, regardless of various debts and depreciation methods.

Having determined EBITDA, it is possible to calculate the organization's debt burden. To do this, the debt indicators are divided by the nominal profit.

The indicated values ​​of EBIT and EBITDA are reduced to one - "reduction to a common denominator" economic indicators organizations from different countries. tax systems different states are not similar to each other. This means that income tax rates will also not be equivalent. Introduction to accounting practice EBIT and EBITDA profits can correct this situation.

Revenue is an indicator of financial well-being obtained by selling services, products for a certain period of time. Its purpose is to compensate financial costs, which were spent on the production of products or the operation of a number of services (transportation, storage, delivery, rental of premises).

The purpose of the definition of "revenue" in the field of small, medium and large businesses:

• payment of additional expenses (fuel, utility bills, purchase of spare structures);
• provider services;
• payment of wages to employees of the staff of a company or firm.

Reference! The efficiency of entrepreneurial activity depends on the amount of revenue. This means that if the company receives a small amount of funds from the commodity circulation chain, then the company can be regarded as unprofitable or bankrupt.

We tell about the reasons for which revenue volumes can be low and what to do in such cases.

The source of revenue financing depends on several components:

1. sale of goods or provision of services;
2. financial result from the sale of valuable assets;
3. monetary contribution to the development and implementation of the product.

Calculate revenue, possibly using one of the accounting calculations:

• cash method. It involves the calculation of the proceeds from the funds received to the account of the enterprise in order to pay for products.
• accrual method. It is used in the presence of consumer obligations to pay for the services and products of the enterprise.

You will find a more detailed definition of the term "revenue".

Definition of the word "turnover"

The definition of the word "turnover" in the field of entrepreneurial activity means the circular movement of funds in cash and non-cash ways for the services rendered by the enterprise (sale of goods and services). Cash turnover is a transaction of funds between legal and natural representatives.

Purpose of cash flow:

Non-cash turnover of financial resources is the transfer of funds from the payer's account to the recipient's account. For a cashless transaction, business owners open settlement accounts in the banking system, for the purpose of self-distribution of funds.

Important! Funds are paid banking system by decision of the Government of the Russian Federation within the agreed time frame specified in the loan agreement.

A current account gives the owner the right to:

• receive incoming funds from the payer;
• withdraw funds on request.

Successful financial turnover of entrepreneurial activity consists of two fundamental components:

• commodity settlement for the sale of the product between companies;
• payment transactions that are not related to the goods: the issuance of wages, interest on tax.

Turnover is the amount of funds collected during the period of sale or operation of services. You can determine the total amount of gross level funds by subtracting the difference between the amounts invested in the purchase + the volume of goods sold.

What is a "turnover"?

Trade turnover is the process of product movement according to the "producer-consumer" algorithm. He can be:

1. wholesale– purchase of products in order to develop retail trade;
2. retail- delivery of goods directly to the customer without overpayments.

The successful implementation of the company's turnover depends on a number of factors:

Goods turnover is often sold according to the "Fifo" principle. Its essence lies in the fact that the incoming goods from the enterprise to wholesale buyers go through the processing stage - the establishment of their own pricing policy, in other words, cheating, caused by a feeling of mistrust or stinginess towards products on the part of the consumer. This position is due to the following factors:

1. low pricing = trick;
2. inflated prices = hole in the wallet.

It is possible to measure the performance of the “turnover” parameter by analyzing the supply:

• low level: a limited product that is not in demand;
• high level: fast sale and delivery of goods; purchase of products in advance by consumers.

Is one concept different from another or not?

So what is the difference between all these definitions? Below is a comparative table of differences, an entrepreneurial chain of related concepts for successful business:

Revenue	turnover	Trade turnover
financial resources received from general entrepreneurial activity; to deduct the total amount of revenue, it is sufficient to have information about all types of financial transactions in the framework of entrepreneurial activities; an active attribute of the economic sector resulting from the conduct of commercial activities; the status occupied can be: zero or positive; starting point of profit; Responsible for the activities of selling products, goods and services.	the cash equivalent of the difference between revenue and expenses; to calculate the gross indicator, it is necessary to have information about income + the amount of expenses of the enterprise; used by different social strata (students, pensioners, unemployed citizens); has a negative value due to an increased indicator of revenue over profit; guarantee of finance for a subsequent deposit or promotion of goods; is responsible for the receipt and transaction of funds for the products provided.	an indicator that regulates the movement of exclusively goods in the direction of "producer-consumer"; the result of the turnover is calculated according to the formula: incoming revenue - the amount of products issued; trade is realized by observing two economic features: material support, exchange for financial resources; end point of profit; is responsible for the free transfer of the ordered goods from the manufacturer.

Revenue - central concept in small, medium and large businesses. Its purpose is the same everywhere:

1. control of all income of the enterprise;
2. analysis of demand for the products or services provided;
3. formation of a holistic picture of the stability of the enterprise.

Based on it, the manufacturer indicates the pricing policy and the volume of goods produced. Its main difference in comparison with turnover and turnover is that not a single component is subtracted from the revenue indicator taken. It is designed for business development and correct operation without supply disruptions.