How much did your business sell this month? Revenue answers that question. It measures sales activity, but does not tell you whether you are making money. For that, you also need to look at costs and payments. This article explains the figures in the context of a Swiss business.
At a glance
- Revenue is the value of goods and services sold over a period.
- For several products, add together the quantities sold multiplied by their net unit selling prices.
- VAT charged on behalf of the tax authority is not income belonging to the business.
- Revenue, profit and cash receipts are three different concepts.
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What is business revenue?
Revenue, also called turnover or sales, measures sales from business activity over a defined period: a month, quarter or financial year. In French-language Swiss accounts, it is called chiffre d’affaires, often abbreviated CA.
Define what the figure includes. Net sales take account of relevant discounts, rebates and returns. Owners’ capital contributions and loans are not revenue. Not all accounting income is sales revenue either: financial income and other transactions must be classified according to their nature.
The income statement reports sales income. You cannot calculate revenue directly from the bank balance.
Should revenue include or exclude Swiss VAT?
For a VAT-registered business that charges VAT, sales are normally analysed excluding VAT. A CHF 1,000 service taxed at the standard Swiss rate of 8.1% produces an invoice of CHF 1,081, including CHF 81 in VAT. The full cash receipt of CHF 1,081 is not sales income.
A business that is not VAT-registered must not deduct imaginary VAT from its prices. If you use a special VAT reporting method, agree with your accountant how the accounting presentation and management figures should be reconciled.
Statutory thresholds sometimes use their own definitions of turnover. Do not automatically take a sales spreadsheet total as the basis for a VAT or accounting obligation without checking the applicable rules.
Extracting the amount excluding VAT
For an invoice subject to the standard 8.1% rate, the amount excluding VAT is VAT-inclusive total ÷ 1.081. Thus CHF 1,081 including VAT equals CHF 1,000 excluding VAT plus CHF 81 in VAT. Do not simply subtract 8.1% from the inclusive total: the rate applies to the VAT-exclusive amount.
Why is revenue not the same as profit?
A business can generate CHF 200,000 in revenue and incur CHF 220,000 in expenses. In this example, with no other income, it makes a CHF 20,000 loss.
A smaller business can be more profitable if its costs are well controlled. Read our explanations of profit and profit margins to complete the picture.
Revenue is not the same as cash receipts either. A customer may pay after the sale, while an advance can arrive before the related revenue is recognised. Monitoring payments (in French) therefore remains essential.
How should you analyse revenue growth?
Compare periods of equal length and allow for seasonality. An August dip may be normal for a consultancy but concerning for a summer-focused business.
Break down the change: did you sell more units, raise prices or change your product mix? A 10% increase driven only by prices tells a different story from growth in customer numbers.
Also examine customer concentration: growth driven by one large customer may increase commercial risk. If variable costs or payment delays rise faster than sales, growth can put pressure on cash flow.
Using revenue in your forecasts
Build forecasts from understandable assumptions: customer numbers, average order value, purchase frequency, production capacity and seasonality. A target of 20% growth needs to be linked to practical actions and resources.
The budget (in French) translates these assumptions into income and expenses. The cash flow forecast (in French) converts them into expected receipt and payment dates. Connecting the two is more useful than an isolated sales target.
Turn sales growth into profitable growth
Rising revenue is encouraging, but becomes meaningful when considered alongside margins and cash flow. Monitoring these together helps identify genuinely profitable sales, anticipate funding needs and adjust forecasts.
Want reliable figures for managing your business? Our accounting support helps you organise this monitoring and understand your accounts, so your next decisions rest on a clear financial picture.
Frequently asked questions
Where do I find revenue in the accounts?
In sales income in the income statement, taking account of the net presentation and the scope of the figure used.
Does a loan increase revenue?
No. It increases cash and creates a liability; it is not a sale.
How do I calculate revenue growth?
Subtract the previous period’s revenue from current revenue, divide by the previous period’s revenue and multiply by 100. If the previous figure is zero, this percentage cannot be calculated in that way.
Sources and references
Romain Prieur is a Swiss-qualified accountant and founder of Entreprendre.ch. With more than ten years of experience in audit and business advisory in Switzerland, he advises entrepreneurs on company formation, accounting and taxation.
How do you calculate revenue?
Revenue = sum of quantities sold × net unit selling price.
Selling 1,000 products at CHF 65 excluding VAT generates CHF 65,000 in sales before adjustments such as returns or discounts.
Here is another example with several categories:
On mobile, scroll the table horizontally to see all columns.
For services, the calculation may use billable hours, fixed fees, subscriptions or work performed. Revenue must still be recognised in the correct period: the invoice date does not resolve every case.
Moving from gross sales to net sales
Annual example excluding VAT: product A generates CHF 20,000, product B CHF 15,000 and services CHF 9,000. Sales before adjustments total CHF 44,000. Returns of CHF 2,000 and discounts of CHF 1,000 reduce net revenue to CHF 41,000.