Business, Effective secrets to help businesses increase net revenue in the new era is one of the important indicators that businesses always pay special attention to. So what is net revenue and how to determine and calculate it accurately? This article by coming will provide readers with the most detailed information about this index.
1. What is net revenue?
Net revenue is defined as the total proceeds from business activities after deducting relevant deductions and taxes. These deductions include: import and export taxes, returned revenue, trade discounts, sales discounts,...
The meaning of net revenue:
- This is an important index, helping to reflect and measure the business results of an enterprise before taking into account related costs. These costs include: selling costs, management costs, financial costs and taxes.
- Net revenue accurately reflects the results as well as the quality of revenue from sales and service provision activities of the business. From there, it will help managers and investors evaluate effectiveness and come up with more effective business strategies.
Net revenue is the most important indicator for every business
2. How to calculate net revenue
How to determine net revenue:
Net revenue = Overall revenue - Revenue deductions
In there:
Overall revenue: Is the total sales value of all products, goods and services that a business provides.
The deduction from revenue: including value added tax (VAT), special consumption tax, import and export tax, trade discounts, sales discounts, returned sales and other indirect taxes.
Pursuant to Decision 15/2006/QD-BTC Enterprise Accounting Regime of the Ministry of Finance, formula for calculating net revenue are specified as follows:
Net revenue = Overall revenue of the business - Sales discounts - Sales returns - Sales discounts - Indirect taxes
How to determine net revenue
3. Factors affecting net revenue
Understanding the influencing factors net revenue is an important key to help businesses build more effective business strategies. The following are some of the influencing factors net revenue:
Price: Price is proportional to revenue. This means that a higher selling price for each product/service will bring a larger profit when other factors remain unchanged. However, high selling prices can also be a double-edged sword that affects customers' spending decisions. Prices that are too high will cause consumption volume to decrease, thereby negatively affecting the market net revenue.
Product/service quality: This is a key factor to build trust and attract more customers. When a product or service is of high quality, customers will be willing to pay a higher price and the likelihood of returning to purchase also increases. Therefore, businesses need to invest in development and quality control to ensure they meet the needs and desires of customers.
Consumer market: When market demand increases, the product will be sought after by more customers, thereby promoting revenue growth. Therefore, businesses can consider implementing strategies to expand consumer markets to increase the number of customers and boost sales.
Product consumption and production volume: Large consumer demand while low product supply will be an opportunity to increase revenue for businesses. However, if businesses do not calculate carefully and produce too much, exceeding market demand, inventory will occur. At this time, storage costs will arise, causing loss of revenue for the business.
Structure of the consumed product: Diversity in the structure of consumed products is also an important factor to positively influence net revenue. Job cProviding a variety of products that meet different customer needs and preferences will help attract more customers. Since then, the product consumption market has increased and revenue has also grown positively.
Sales policy: The implementation of the Promotions, discounts, customer support,... are effective policies that help attract customers and increase revenue.
Several factors affect net revenue
4. Effective ways to increase net revenue
Here are some suggestions to help your business grow net revenue effective.
Optimize pricing strategy:
Pricing strategy is an extremely complex process, requiring businesses to consider carefully to come up with an appropriate strategy. Some ways to optimize pricing strategies include:
- Value-based pricing: Businesses need to clearly determine the value of the product/service they bring to customers. From there, the business will offer a suitable selling price, helping customers receive value worthy of the money they pay. This will increase purchase satisfaction, thereby stimulating spending ability, helping to bring revenue to businesses.
- Discount strategy: Businesses can apply discount policies to stimulate customers' purchasing behavior, thereby increasing sales according to specific goals. However, businesses need to clearly define their goals to avoid uncontrolled price reductions, affecting profits.
- Purchase discount: Job cProviding purchase discounts for customers who buy in large quantities is also a positive strategy to help increase revenue for businesses.
- Purchase allowance: Businesses can encourage customers to pay early with purchase subsidies, thereby boosting sales and optimizing cash flow.
New product/service development:
Developing new products/services will help businesses meet the diverse needs of customers. This not only helps increase purchasing behavior but is also an opportunity to expand the market and penetrate new markets. From there, businesses will create more business opportunities, stimulating growth net revenue.
Expanding markets and customers:
Expanding the market is a good opportunity to help businesses attract more new customers, thereby growing net revenue. In addition, cooperation with many different partners will also help businesses expand their customer network. This is extremely beneficial for businesses in increasing their position and competitiveness in the market.
Effective financial management:
Financial management plays an extremely important role, helping businesses make policies to use capital effectively. In addition to quality human resources, businesses should also invest in comprehensive business management software coming.
Viindoo software provides a comprehensive view of the company's financial situation, providing effective analysis and forecasting of revenue and expenditure. This will help improve the overall performance of the business. Viidoo's special features include:
- Integrating features to automate all accounting operations of the business.
- Analyze and control financial data throughout in real time.
- Comply with multinational accounting principles and standards.
- Ability to forecast cash flow, smart and effective corporate financial planning.
Effective secrets to help businesses increase net revenue in the new era
This article has provided you with detailed information about net revenue. Hopefully this information by Viindoo will help you in evaluating business performance and devising appropriate development strategies.