How do I calculate monthly revenue in e-commerce?

nayeko
Visitor
2 0 0

Hello, I'm totally new to Shopify and also in the industry. I've never sell anything so doing all these accounting stuff is driving me crazy

I'm trying to fingure out how much I actually made this month. But when I do the math to count revenue, I wonder is:
Revenue = Sales + shipping charged - taxes?

It's confusing me a lot because I'm not sure is it the right way.
Can anyone help me with this?

Reply 1 (1)

TrueProfit_Jen
Shopify Partner
40 1 9

Hello @nayeko ,

 

If you want know how much you actually made in one month, you have to calculate the Net Revenue.
To calculate net revenue, you can use the following formula:
Net Revenue = Gross Revenue - Returns - Discounts - Allowances

 

  • Gross Revenue can be understand as Total Sales
  • Returns: Returns can be understand when customers have returned for a refund or exchange.
  • Discounts: If you offer any discounts or promotional offers to customers, the value of those discounts is subtracted from the gross revenue.
  • Allowances: Allowances are adjustments made for damaged or defective products that were not returned by the customer but were compensated in some way. The value of these allowances is subtracted from the gross revenue.

Calculating all by yourself can take times and can be confusing. You can use a third-party app like TrueProfit to help you with all accounting task. With TrueProft, it can:
- Sync data from all your ad channels, shipping platforms, etc., guarantee all metrics are accurately calculated and automatically updated.
- Get product and customer anaytics with metrics like average order value (AOV), Customer Lifetime Value (LTV),etc.
- Set up your COGS and shipping costs by location, quantity, weight, etc or taxes by rules, frequencies, and rates for different countries
- Many other features that will offer you more flexibility and scalability in managing your stores

 

If you're interesting to learn more about us, visit our app listing: TrueProfit

 

Hope this can help.
Jen from TrueProfit

TrueProfit - The Ultimate Real-time Profit Tracker For Shopify

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