Many of us who don’t know much about finance often make a mistake about income and revenue. There are common misconceptions about both of these, and we often see people who make these mistakes. So now I want to tell you the difference between income and revenue. I also hope that it will be useful for young people who will do business in the future.
In general, we know this as income. This is something that many people know. Here, there are also differences in income types according to the type of business. Although income is correct, it is expenditure from actual income. After deducting taxes, the remaining money is called income. For example, let’s say one day’s sales are 100,000. Of this, investment money of fifty thousand, Ten thousand labor fees After deducting the cleaning fee of ten thousand, the remaining thirty thousand is your income. If that’s all, I think it will be clear.
Revenue is just income. But it is different from income. Reveune is the service provided by your business. We aim to earn all revenue from customers for product sales. taxes Revenue is defined as income that does not deduct expenses at all. As an example above, if we say that all the 100,000 sold in one day is Revenue. The fees to be paid through this, After deducting expenses, the remaining money is defined as income.
How will they manage?
This is the most basic thing about accounting and shows the difference between Income and Revenue. Through this, other accounting records are written and the profit and loss of the business. You can analyze the expenses. By looking at the income of a business, the expenditure in this business, When managing operating expenses, you will know whether they are being managed effectively. By looking at revenue, you can easily see if you can manage your sales well, so it is important to distinguish between the two, and it would be best to know them clearly.
In short –
Production service All money coming in from any business such as trading must be recorded as Revenue. But you have to know that this money is not your net income. So, on the other hand, the expenses spent on the business, You will also need to write down the payments. After deducting the expenses from the income, only the net remaining amount should be considered as your net income, net income or profit. Like the example above, From 100 income, subtract 70 expenses and only 30 is his income. It would be beneficial to know the difference because most people don’t take care to deduct expenses and mistake everything that comes in as income.
If you remember that revenue – expenditure = net income, it’s fine.