Revenue is the main indicator of the economic activity of an enterprise

The meaning, purpose and task of any production consists ofin making a profit. Revenue is a means of selling products. These funds are transferred to the account of the organization for the goods provided to consumers, the work performed or the service provided. Revenue is not only the main source of revenue for the company. These funds are also used for cost recovery.

Revenue is the main indicator of the economicactivity of the enterprise. In each economic sector, the means of implementation will have a more specific definition. So, for example, for an industrial enterprise, revenue is the sum of sold products, for a construction company, the volume of work that has been produced is expressed in value, and the turnover for a trade organization.

The revenue of an organization can be not onlythe result of the main activity. The enterprise can receive funds from non-operating transactions. In particular, revenue can come from leasing out premises, carrying out transactions using securities.

The proceeds from sales represent incomeonly partially. They (the funds) are used by the enterprise to purchase raw materials, pay off the debt, pay taxes and deduct payments to different budgets and funds. All the funds that an organization receives (or expects to receive) in accordance with the implementation of concluded contracts, net of tax deductions, is net revenue. Part of the money goes to pay wages. Thus, from the whole amount, the necessary deductions are made first, and then the net income (net revenue) remains.

One of the most important moments in the economicthe timeliness of the receipt of funds from sale is considered to be the activity of the enterprise This moment is given great importance in connection with the fact that it is when revenue is received that the cycle of activity of the organization is completed. The receipt of funds allows the company to meet the costs of production and create conditions under which a new cycle of activities will begin. Along with this for the enterprise, means of sale are the main and regular source of income.

Timeliness of receipt of funds providesfinancial stability of the organization, excludes arrears in payments to banks, the budget, tax authorities, funds, suppliers, as well as its own employees. If untimely revenue is received, the enterprise is not in a position to fulfill its obligations, which can lead to the imposition of fines, loss of profits, and in some cases, to a halt in production.

There are two ways to determine the means of implementation.

For tax reporting, a cash or accrual method can be used.

In the first case, the revenue is determined by the payment terms for the shipped products, that is, after crediting the cash (to the cashier) or non-cash (to the bank account) funds for the goods.

The accrual method determines revenue according to the terms of shipment of goods and presentation of the relevant settlement documents to the buyer.

As a rule, the first method is applied in small enterprises. Other organizations should follow the accrual method, taking into account the proceeds after the shipment of the goods.

In determining the funds from the sale in factperformance of work, provision of services or shipment of goods, tax liabilities are formed at the same time. Their occurrence does not depend on when the company receives money from the buyer. This may form a lack of financial resources of the organization.

The amount of revenue is greatly influenced bypricing process. To a large extent, the value of the goods is determined by the market, in accordance with the balance of supply and demand. The price of the products produced by the enterprise must be formed in such a way that after the cost recovery the profit remains.