What is sales? How are sales and revenue different?

In business, the two concepts of sales and revenue often cause confusion when evaluating the performance of a business. So what is sales ? How are sales and revenue different? In this article, 1C Vietnam will learn in detail about these concepts and the importance of each index in business management and development.

1. What is sales?

Sales is the total amount of money a business earns from selling goods and services in a certain period of time (week, month, quarter, year). Sales include both collected and uncollected amounts such as pre-delivery, pay-later orders as well as consignment agents. Sales reflect the business situation of the enterprise: the higher the sales, the more effective the business operations and the ability to generate high profits.

2. Accurate sales calculation formula

From the concept of what sales are , we can derive the following formula for calculating sales:

Sales = Selling price x Number of products and services sold

In there:

• Number of products and services sold: Number of products or services sold in a certain period of time.
• Selling price: The price at which a business sells its product or service to customers.

For example: A store sells 100 T-shirts for 200,000 VND/piece in August, then that store's sales in August are:

Sales = 100 x 200,000 = 20,000,000 VND

3. How are sales and revenue different?

How are revenue and sales different? Below are suggestions from 1C Vietnam:

The following example will help businesses differentiate these two concepts more clearly: If business The total costs of business X, including operating costs, depreciation and capital, are 150,000,000 VND. Therefore, the total income or revenue will be 150,000,000 VND after deducting expenses.

4. The role of sales in businesses

By tracking and analyzing sales, businesses can identify consumer trends, identify best-selling products and promptly detect potential problems in the business process. In this section, let's explore with 1C Vietnam the important role of sales in promoting growth and maintaining business competitiveness in the market.

4.1 Measuring business performance

Sales is the total value of products/services sold in a certain period of time, reflecting the development and business efficiency of the enterprise. Tracking sales helps evaluate growth and competitiveness in the market. Increased sales demonstrate efficiency and customer acquisition capabilities, while decreasing sales can indicate problems that need to be addressed.

4.2 Promote business development

High sales provide capital for businesses to expand production, research and develop new products and expand markets. This is also the basis for businesses to increase profits and brand value, attracting new customers.

4.3 Determine competitive position in the market

Sales help businesses determine their position and evaluate effectiveness compared to competitors. If sales are outstanding, the business will have a competitive advantage and attract consumer attention.

4.4 Create cash flow for businesses

High sales play an important role in cash flow and business operations of the enterprise. This index is capable of supporting equipment purchases, marketing campaigns, payment of raw material costs, labor and management. At the same time, high sales create profits to expand scale and develop new products/services, attract the attention of investors as well as business partners, provide capital lending and cooperation opportunities. development cooperation.

4.5 Increase employee motivation

Many businesses in Vietnam apply bonuses to employees when they achieve sales goals. This will make them feel satisfied and proud, motivating them to work hard to achieve higher results. Increasing personal income from high sales also helps employees have more goals to work more effectively and creatively.

5. Solutions to increase sales for businesses

From understanding what sales is , administrators can easily propose plans to increase sales. Below are some options proposed by 1C Vietnam:

• Manage collaborators and sales agents by setting up individual discounts to expand your distribution network.
• Set wholesale prices based on purchase volume and offer additional services to encourage frequent purchases.
• Provide accompanying services such as free delivery, product gifts or vouchers when reaching a purchase invoice from a certain price, encouraging regular shopping.
• Use discount codes and promote on online channels to attract customers and increase sales.
• Promote discount codes on online advertising channels such as Facebook, Email Marketing, Shopee, Lazada,... to notify about promotions.
• Apply appropriate discounts to boost sales, especially with wholesale customers and distributors. Businesses need to plan in detail to avoid affecting product quality and customer trust.

1C Vietnam is also providing a comprehensive business management system 1C:ERP with an automatic discount calculation module with partner/sales agent management features, allowing sellers to adjust discounts quickly. effectively:

• Set discount % or discount type (applies to all products, specified products, or collections).
• Import and export discount payment report files for sales partners/agents.
• Display a notification when there is a discount from an order containing products that do not belong to the dealer, to limit fraud.
• Customize separate discount rates for each different partner/agent.
• Track agent discounts by each status (approved, rejected, waiting for payment, paid).
• Review your entire payment history or specific time periods.

6. Effective sales management with 1C:ERP solution

1C:ERP is a comprehensive resource management solution for businesses, designed to integrate perfectly into each organization's operating model. With comprehensive development and implementation experience from hundreds of partners nationwide, 1C:ERP is committed to optimizing the experience for each customer, effectively supporting sales growth in particular and development. business development in general.

The system provides tools to help manage and plan business effectively, and analyze and report indicators so that administrators can establish plans to increase sales. Outstanding features of the business management module in the 1C:ERP system include:

• Wholesale and retail management, including temporary ordering.
• Retail automation and in-store device integration, including product catalog management, price tag and barcode printing, and membership card support.
• Apply mobile applications for commercial activities.
• Flexible pricing system, multi-currency support and unique agreement templates.
• Dedicated reporting and consignment sales service, dealer support.
• Coordinate delivery plans, including private and rental fleets.
• Optimize the process of preparing inventory transfer records between companies.
• Provide acceptance notes for tasks according to specific fields of activity or according to orders from customers.
• Real-time analysis and reporting to support effective management.

A clear understanding of the concept of sales creates the basic foundation for businesses to measure and evaluate business performance. Managing and optimizing sales not only helps increase revenue but is also an important factor in building a sustainable development strategy. Hopefully this article has provided businesses with useful information to apply in practice. If you have any questions about the 1C:ERP solution, please contact 1C Vietnam for support.