It simply describes total money earned by the business. ‘Revenue’ never accounts for expenses and costs. In these cases, revenue refers to the income or earnings in each situation but may not refer to a particular timeframe. You may also ask what revenue was earned for a particular contract or from a specific customer. For instance, you may say that you’ve earned more revenue from the sales of a specific product vs. The term ‘revenue’ is commonly used in business in other situations. If you were referring to your Income Statement from the month of March, the top line of that statement would contain the $100,000 in revenue. All of these sales are included as revenue during that time period. In accounting terms, once they've invoiced a customer the amount is considered revenue.Ī business may have revenue in a given time period that includes invoices they have sent out to customers, as well as cash payments that have been made at the time of a purchase. In this case, the business is not receiving payment in actual cash, rather it is ‘owed’ $100,000. Revenue is generally described in terms of a specific time period, such as revenue in a particular month, quarter or year.įor instance, if a service company invoiced $100,000 in March, then they have earned revenue of $100,000 for that month. Your revenue may also include money earned from other sources, such as interest, fees and royalties. Revenue refers to the income your business has earned from the sale of your goods and services. Before we get into the dangers, let's take a look at the difference between the three. So what's the difference between revenue, profit and cash flow and why should you care? Well, if any of the three are out of whack, your business is in trouble.
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