In business these two terms seem pretty similar. In fact, there is a common misconception that if you keep just one of them healthy, the other has to follow suite.

Well, it is not quite that simple.

What is Revenue?

Revenue is what is sometimes termed as gross sales. This figure represents every single coin that came into the business through your major money-earning activity (sale of products, or offering a service).

Additionally, if you have any other sources of income, like an investment gain, it is also included in the revenue.

Revenue is the top figure in your income statement.

What is Income?

Income, also referred to as “Net Profit” or “Net Income”, is the amount remaining after all your expenses have been deducted from the revenue.

Income is commonly referred to as the company’s “bottom line”. It is the clear indication of whether or not you are making a profit.

Income is the figure that appears at the bottom of your income statement.

Why is it important to understand the difference?

In most cases, the revenue and income figures are worlds apart. That notwithstanding, these two figures are a clear blueprint of how your business is doing.

By understanding these terms and figuring out how they relate to each other, you can in turn strategize how to improve your Income as well as your revenue.

How we come in

At Hyaat, we are all financial experts well-versed in all things finances. This means if you have trouble balancing these two figures or figuring out why they are worlds apart, we’ll be here to explain, strategize and implement ways to improve both for your business.

Talk to us today.

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