1.2. What is the difference between sales and revenue?
Compare Sales Revenue
Concept Sales is the total amount of money a business earns through business activities, selling goods/services. Is the total amount of revenue (including cash, assets) received from selling goods, providing products/services.
Scope Sales are calculated based on the amount of money received from sales activities. Revenue includes all proceeds from sales and other activities such as asset leasing, interest on deposits, etc.
How to determine Sales are determined by multiplying the quantity of products/services sold by the unit price of those products/services. Revenue is determined by the total revenue from sales activities (selling price multiplied by output) plus revenue from other activities.
General meaning Is the result reflecting the business performance of an enterprise over a specific period of time. Shows the scale of business operations of the enterprise, is an index to evaluate the working efficiency of employees, accounting activities, etc.
The meaning of sales in business
Sales are meaningful in business activities, specifically:
Business performance evaluation
Sales are not just numbers, but an important measure that reflects the total value of products and services sold in a certain period of time. This is an important indicator to evaluate the growth and business performance of an enterprise.
Tracking sales over time helps businesses understand their growth and competitiveness in the market. When sales increase, it shows that the business is attracting customers well and operating efficiently. Conversely, if sales decrease, it can be a warning sign of problems that need to be addressed to improve the business situation of the business.
Building financial resources for businesses
High sales not only help businesses have more capital to pay for production and business activities such as: raw material costs, labor costs, management costs and marketing costs but also create profits. This profit is an important financial source to help businesses reinvest, expand scale and develop new products.
Furthermore, high sales also positively 2024 brazil telegram users library affect the evaluation of stakeholders such as investors, banks and business partners. When a business has good sales, it is easier to attract investment, borrow capital and establish new business partnerships.
Promote business growth and development
High sales provide capital to invest in business activities, expand production scale and research and develop new products, thereby contributing to promoting business growth. High sales are also a solid
foundation for increasing profits and reinvestment.
Moreover, high sales also contribute to enhan effective marketing strategies for the education cing brand value. When a business operates effectively and is trusted by customers, attracting new customers is easier, creating momentum for sustainable bus cg leads iness development.
Motivate employees
Businesses with high sales and good profits make employees feel secure about the products that the business is selling so that they can confidently introduce them to customers and strive to complete their work. Because when employees complete their sales targets, their personal income will also increase and they will have more motivation to work harder. This will increase the employee’s commitment to the work they are doing.