sales revenue

Since this relates to the normal operating activities of the business it is sometimes referred to as operating revenue. Consider focusing your sales campaigns on your most profitable products or services. That means sales revenue will equal 5,000 units multiplied by $20 or $100,000. Calculating sales revenue ensures you generate enough sustainable revenue to keep your business profitable. Remember, you must account for overhead and acquisition costs.

  • For example, a company can have $10 million in sales but $12 million in revenue if nonoperating income totals $2 million.
  • The difference between revenue and sales is relevant to investors viewing company reports.
  • Bear the difference in mind when calculating and recording your revenue.
  • Gross sales revenue is the total of all sales of goods and services without taking into account any returns, discounts, or allowances.
  • This deferred revenue is recognized when the accordion is delivered to the customer in the following month.

Sales revenue is often referred to as simply revenue, sales, or turnover and normally these terms can be used interchangeably and mean the same thing. In the stricter sense, sales specifically refers to the act of selling whereas revenue is the monetary value of the sales. Income is sometimes used but usually refers to a business in which services rather than goods, are sold. Being able to differentiate between the different types of revenue  is vital for accounting, particularly with respect to net and gross revenue. Now that we know how to calculate sales revenue, let’s discuss how you can improve it. To get the average service price, Keith adds up the total cost of his services, which is $870, and divides it by 5.

What’s the difference between revenue and sales revenue?

When you’re forecasting sales, the last thing you want is a garbage-in-garbage-out situation. But to input clean data, you need to be consistent and accurate when collecting data in the first place. After gathering your data at different stages of the sales cycle, it’s important to look for strange anomalies, like coding errors or sudden spikes and dips. Let’s work through some sales revenue examples to see how you might calculate yours. While your revenue can show you have much money you are bringing in, your net profit can point to any discrepancies in your operation.

Pain’s music, my sales background affects how I approach the world of sales ops. Many companies generate additional income from the sale of assets during periods when they’re cash poor. Other non-operating revenue gains may come from occasional events, such as investment windfalls, money awarded through litigation, interest, royalties, and fees. Revenue is the total income a company generates by the sale of goods or services that can be attributed to the company’s core operations. For March 2024, Meta said daily active users across its apps — a metric the company terms “daily active people (DAP)” — was 3.24 billion, up from 3.19 billion in December 2023. Meta did call out Threads, its Twitter-like app that launched last July, as having more than 150 million monthly active users (up from 130 million last quarter).

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The difference between revenue and sales is relevant to investors viewing company reports. Some companies inaccurately use the terms sales and revenue interchangeably. However, while sales are revenue, all revenue doesn’t necessarily derive from sales. Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

Net sales revenue offers a clearer picture of how much cash a company actually brings in. Sales revenue comprises all funds generated from sales, whether products or services. Any money coming in outside of selling goods is known as nonoperating income. Your gross revenue shows how many goods or services you sold and how your team is performing, while your net revenue is how much money you generated. Sales revenue is a company’s income generated from vending goods or services.


Revenue for federal and local governments would likely be in the form of tax receipts from property or income taxes. Governments might also earn revenue from the sale of an asset or interest income from a bond. Charities and non-profit organizations usually receive income from donations and grants. Universities could earn revenue from charging tuition but also from investment gains on their endowment fund. These two terms are used to report different accumulations of numbers.