Revenue
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.
| Include | Don’t include |
|
|
Calculation
| 500 € |
| × 50 units |
| 25.000 € |
| Alias | Sales/Turnover/Income |
| Abbreviation | REV |
| Unit | Currency (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.
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€.
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