Any, even the smallest production, organizes its activities in such a way as to ultimately receive income from it. Proceeds from the sale of products - this is all the money that came into the account of the enterprise after the sale of products, work or services. It is the main source of not only income, but also funds to reimburse all costs. Accordingly, the greater the revenue, the better it is for the enterprise. It should be noted that the company can receive revenue not only from its main activities, but also from the so-called non-operating operations. This may be the leasing of free premises, the receipt of income from operations with securities, etc. Other revenue from sales is another way of additional income, associated, for example, with the sale of retired fixed assets and materials.
Each company wants the revenue from sales of products to be as large as possible. But this does not always happen, because its size depends on many indicators, which in the end result give a certain amount of revenue. From these same indicators depends on how quickly the proceeds go to the disposal of the enterprise. This is very important, because it is precisely its part that will be used to pay off debts, purchase the necessary raw materials, pay for renting premises, pay wages, and pay taxes to the budget and extra-budgetary funds , etc. In other words, sales revenue only partially represents revenue. Only after all payments have been made, we can talk about the net income of the enterprise. One of the most important factors affecting the size of revenue and the speed of its receipt is the pricing process. The price of goods is determined based on the ratio of supply and demand. This is a kind of compromise between the capabilities of the buyer and the desires of the seller. Accordingly, the faster this compromise is found , the faster you can rely on revenue.
Speaking about other factors affecting the amount of revenue from sales of products, work and services, the following should be noted: the volume and speed of products (work performed and services rendered), the range of products (work, services), product quality (work, services), delivery (fulfillment) dates, observance of contractual obligations, as well as workflow deadlines.
Recently, two methods have been used to determine when to receive sales revenue:
· On shipment and presentation to the buyer of settlement documents (the so-called accrual method).
· By payment, when the proceeds are calculated only after the money has arrived at the current account or at the cash desk (cash method).
The cash method is mainly used for the taxation of small enterprises, but the accrual method should be followed by all other enterprises, thus taking into account revenue only after the product was shipped, a service was provided or work was performed. As shipments proceeds are determined in accounting.
If the proceeds from the sale of products are recognized upon the shipment of products, the indication of services and the performance of work, the obligation to pay taxes arises immediately, regardless of when the money was received from customers. In this case, the company can create a reserve for doubtful debts, the creation of which goes before taxation. Doubtful debt refers to unsecured customer debt that has already expired.
Thus, the proceeds from the sale of products and other activities are those funds that provide the enterprise with stability. If, for any reason, the proceeds are not available, the company may suffer serious losses.