Revenue

Often confused with profit but very different things.

Revenue is money received for sales or services.

The amount earnt before subtracting expenses.

It is often found on the top line of the profit and loss statement.

Revenue – cost of goods sold = net income.

In accruals accounting revenue is recorded when goods or services have been provided not when payment has been received.

In cash accounting revenue is recorded when payment is received.

Revenue can also be in the form of interest or fees earned.

It is useful to categorise these into sales revenue or income and other income.

Also referred to as operating revenue and non-operating revenue.

Revenue is vital to ensuring a business can pay for all expenses and be sustainable.