What is the revenue and how it differs from profit?

every aspiring entrepreneur faces the need to carefully understand the financial terminology.Even if it works very competent accountant, he needs to understand the basics of production and income.In particular, it is important knowledge that such revenue, how does it differ from the profit as it affects the level of the enterprise and how it is possible to plan it.

Concept and accounting methods

Very often, those who only conceives his own business or in the beginning of the business the way, there is a misconception that such revenues.Often confused with the net income of the enterprise, which is why there are errors in planning.The result usually becomes bankrupt.Meanwhile, to understand the difference is very simple.Revenue - is the result of the implementation of the products, works or services.It consists of receipts received as payment for goods (barter) and receivables.In addition, revenue is considered to be the financial result of the investment activity in the sale of non-current assets or securities.However, it is mainly determined by the total income from operating activities.

to account for revenue accountants use two methods:

  • Cash - when the revenue is received for payment to the account in cash or equivalent product.This method is used by enterprises, the proceeds of which does not exceed one million rubles per quarter for the most recent year of operation.
  • Accrual - when revenues are calculated from the shipment of goods to the buyer or the provision of services irrespective of the actual receipt of payment.In this case, the higher the risk of unpaid debts on time, so the company is allowed to establish a reserve fund, reducing taxable income.

calculation and planning

revenues - the main source of financial income for the company, from its regularity depends on the stability of the turnover and work in general.That is why it is imperative to make timely analysis of sales revenue and plan for its arrival.

analysis is taken as a basis the difference between the amount issued and sold products.In addition, it is important to take into account factors that affect the receipt of revenues.The main reason for the low level of profitability of the enterprise may be the release of unclaimed or substandard products.To monitor this situation is necessary to conduct market research.In an effort to increase revenue, the company based on the results of this analysis can improve product quality, reduce the rate of release (in the overproduction), modify or expand the range.

In addition, the level of revenue can affect:

  • disruptions due to various reasons;
  • erroneous pricing policy;
  • wrong marketing approach;
  • breach of contractual conditions suppliers, transporters or buyers;
  • inflation, changes in legislation.

Among these factors there are, which can affect the entrepreneur and there are independent from it.However, a regular analysis of revenue may, for example, show the need to change the raw material supplier or carrier.After all, the quality of the partnership depends on the result of no less than on the characteristics of the products or services provided.

planning proceeds, should make three calculations.The first - a pessimistic forecast, assuming the worst-case scenario.The second - an optimistic, considering the perfect confluence of circumstances.The third - a real calculation, which is something in between the first two.On him and be guided in the normal course of business.

Yet the basis of planning is already earning revenues from product sales.The formula for its calculation is simple: VTK = B, where "P" refers to products sold in units (or performed work, provided services in quantitative terms), "C" means the price per unit, and "B", respectively, the resulting revenue.Only perform the calculation and the analysis, it is possible to build the growth prospects of the company.


understand what revenues should deal with its further distribution.The initial source of the company is the authorized capital.In the course of further work necessary payments are made directly from the already cash.Thus, the revenue covers the necessary payments to the budget, tax and social security payments, utility and commodity costs, staff salaries and other costs associated with the issuance and sale of products.Only that remains after making all necessary payments is the net income or profits of the enterprise.

From the foregoing it is clear that the purpose of each entrepreneur - an increase in total revenue.To this growth was stable, it is important to clearly understand what the revenue and what factors affect its receipt.Competent analysis and planning to a large extent help businesses to operate successfully and grow, and the owner - to get a well-deserved profits.