Revenue is crucial for your business and it is worth being understood perfectly and with all the aspects around it including the different types of revenue, keeping records and what you have to do with the revenue earned.
The most important and crucial thing for every business is to generate sales revenue not simply providing services or goods however the more goods you provide the more sales you make and the more revenue generated in return.
As a business owner, you must make sure that your sales don’t go down. Once sales go down it implies that the sales revenue will also go down and that is definitely not healthy for the survival of your business.
What is Sales Revenue?
Sales revenue refers to the amount of money realized by a business from the sale of goods or services. Alternatively, sales revenue refers to the amount of money that is brought into the business from the sales of products and/or services over a period of time.
Read: Monthly recurring Revenue – Everything You Need To Know.
Revenue is usually reported monthly, quarterly or annually. It indicates whether a company has profited or lost money over that time period. Keeping an eye on your sales revenue can help you manage and reduce costs and maximize profits.
Sales revenue entails and price of a commodity and the quantity.
Price is therefore defined as the monetary value of a commodity. The unit cost/price of a commodity is attained by dividing the total cost by the quantity produced. On the other hand, quantity refers to an amount or number of items or commodities.
Hoping that we have fully understood what sales revenue is, let us handle how to calculate the sales revenue.
Mathematically it’s expressed as;
Sales Revenue= Price x Quantity
- Determining the unit price
- Calculating the total units sold.
- Multiply the price by units.
For product-based companies (goods) the formula is; Sales Revenue = Units Sold x Sales Price
For service-based companies (services) the formula is; Revenue = Number of Customers x Average Price of Services.
Assuming MonkeyPesa sells computers, in March they sold out 100 computers at 1,000,000 Ug.shs, if we are to calculate the sales revenue, you simply get the units of the product sold out multiplied by the price per product. 100 x 1,000,000 = 100,000,000 ug.shs
Considering services; a number of customers x cost per service = sales revenue.
There are different types of sales revenue and these include; Net revenue and Gross revenue
Gross revenue refers to all income earned from a sale with expenses included. Expenses could be; production, shipping, storage, allowances, salaries and so many more.
Net revenue subtracts expenses from gross revenue. Net revenue basically refers to clean or net profits.
There are also other kinds of sales revenue and these include;
Recognized revenue, is recorded as soon as the business transaction is conducted. Once the sale has been completed, you record it there and then in your revenue records.
Deferred revenue refers to money earned in advance of earning. This money is earned from the payment of goods and services that are delivered in the future.
In conclusion, generating sales revenue for your company is simply a matter of knowing the number of unit products sold and multiplying it with the sale price of each product as explained above.
At MonkeyPesa, we are working out the perfect digital marketing solution for your business and for more updates on the product, SUBSCRIBE HERE.
You can contact us on or by a phone call or WhatsApp +256757537658
Subscribe to the YouTube Channel for News and Shows on Tech and Business in Africa https://www.youtube.com/channel/UCm2GHNQ69dtHScOcC2ngqJw
Subscribe to newsletter: HERE