Revenues vs. corporate profits: What is the difference?

What are income and benefits

Revenue

Revenue is the total amount of capital generated by a company without discounting expenses for a specified period of time. They represent the phase prior to obtaining business benefits. Revenue is also known as gross revenue or sales.

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Benefits

The benefits of a company refer to the total amount of capital left after subtracting expenses that the company has had in a certain amount of time. It is the subtraction between the money earned from the sale of services or goods and the company's expenses. Profits are synonymous with benefits.

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What is the difference between cash flow and income

Cash flow is the difference between net money coming in and going out of a company for a certain period of time. It is crucial to know the company's liquidity and ability to pay. Unlike income, cash flow includes both income and expenses to calculate the company's solvency.

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Accounting terms related to income and benefits

• Income statement: Also known as a profit and loss account, it is what a company enters subtracting all expenses. Present benefits to members.
• Ordinary income: These are the usual revenues derived from the normal activity of the company.
• Extraordinary income: Income derived from unforeseen events.
• Net income: Total amount of benefits earned after subtracting all expenses.
• Gross revenue: Total amount of money entered without discounting taxes, interest or commissions.
• Profit margin: Gain obtained before applying VAT.
• Profitability: Relationship between profits and investment made, expressed as a percentage.

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The importance of income benefits

For companies, benefits are more important than revenue. Having a lot of income does not guarantee high benefits if the expenses are equally high.

In the business environment, net profits are a crucial indicator of a company's financial health. While revenues reflect the money that comes into the company from sales and other services, The benefits show true profitability after deducting all operating expenses, taxes and other costs.

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Types of benefits

• Gross benefits: They result from subtracting income and expenses before taxes and amortizations.
• Net benefits: They result after taxes and amortizations are applied.
• Accounting benefits: Difference between income and expenses necessary for business activity.
• Tax benefits: Capital savings due to tax exemptions, bonuses and deductions.

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How to boost the profits and revenues of your business

Buy wisely to maximize benefits

Negotiate more favourable offers with your suppliers and diversify your list by keeping around six key suppliers. This will allow you to get the best conditions and avoid supply problems.

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Analyse your inventory efficiently

Avoid excess inventory and use specialized inventory management software to maintain control of materials and suppliers. This will help you reduce costs and optimize cash flow.

Discover how easy it is to carry out inventory control with taclia.

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Offers more services to increase revenues

Expand the range of products and services you offer to build customer loyalty and stand out in the face of competition.

Diversifying services can increase your revenues and strengthen your position in the market.

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Increase your productivity and profitability

Improve the operational efficiency of your employees and use incentives to motivate the achievement of objectives. The implementation of tools of productivity and continuous training can contribute significantly to your benefits.

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Implement a personnel tracking system

Establish an effective system for monitoring the performance of your employees to improve productivity and increase profits.

Use evaluation tools to identify areas for improvement and reward the good performance of your workers.

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Promote customer loyalty

Implement loyalty programs to keep your customers engaged and attract new consumers.

Offer exclusive promotions, discounts and rewards to encourage loyalty and increase your recurring revenue.

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Modernize and expand your advertising

Develop an effective marketing strategy that includes a presence on social networks and traditional forms of advertising, such as vehicle vinyl.

Higher visibility will attract more customers and boost your revenues.

That's why we invite you to discover how you can create a successful Instagram account for your business.

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Get to know your customers with CRM tools

Use CRM software to better understand your customers, personalize service and improve the customer experience. Knowing their needs and preferences will help you offer a more adapted and effective service.

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Conclusion

Find the balance between profits and revenues while monitoring the company's profitability. With the taclia app, you can track your expenses and income, and get personalized statistics that will help you see the evolution of your business.

In addition, if you need help not to confuse accounting terms, the taclia app can help you make invoices and estimates in a simple way, filling in each field and letting the software calculate automatically. Save time, make it easy and without the need for experience.