Definition

The Revenue KPI refers to all money earned from regular business activities in a set period.

Characteristics

Revenue is the top line figure on the P&L and can be recurring or one-time.

 

IncludeDon’t include
  • All money earned from regular business activities
  • Reduced by discounts and refunds
  • Extraordinary revenues
  • Received interest (except if part of business model)
  • Costs of goods sold

Calculation

 500 €
× 50 units
25.000 €
AliasSales/Turnover/Income
AbbreviationREV
UnitCurrency (Euro/Dollar/YEN/…)

Example

A company sells furniture online. In January they sell 50 couches for 500 € each. January’s revenue is therefore calculated as follows:

 

500 €

× 50 units
25.000 €

Q&A

What if some of my customers don’t pay right away?
The time of payment is irrelevant in accrual accounting. All of sales executed and billed in January are included in January.

What if I sell my company car?
The sale of an asset classifies as extraordinary revenue. It is therefore not included in the revenue KPI.

We are a SaaS business and charge an upfront annual fee. How do we calculate our monthly revenue?
The revenue should be recognised once the service has ben rendered. If you charge 120€ upfront for a year you generate a monthly revenue of 10€.