What is revenue?
- By Book Keeping Pros
- Sources checked 15 Oct 2026
Definition
Revenue is the total a business earns from selling its goods or services, plus other income such as interest, before any expenses are taken away. It is the first line of the profit and loss statement and is also called turnover. Revenue shows how much business came in, not how much the business kept.
Revenue is not profit. Profit is what remains once expenses are taken from revenue, so a business can grow its revenue and still make a loss if its costs rise faster.
Not every deposit is revenue. A bank loan, money the owner puts in and a refund from a supplier all raise the bank balance, but none of them is income the business has earned, so each is recorded in a different kind of account.
In Australia
business.gov.au defines revenue as the amount earned before expenses and other deductions, and says it is also known as turnover. It defines profit as total revenue minus total expenses.
Its guide to cash and accrual accounting explains that the timing of a sale depends on the method. Under cash accounting a sale is not recorded until the customer's payment arrives. Under accrual accounting it is recorded when it takes place, such as when a builder invoices a finished project, even if payment comes later.
business.gov.au lists records of all income and sales transactions among the records a business needs to keep. The ATO says a record should generally show, among other details, the date, amount, description and purpose of the transaction.
Worked example
| Money received | Recorded as | Amount (AUD) |
|---|---|---|
| Cash sales at the counter | Revenue | 2,350.00 |
| Interest from the bank | Revenue (other income) | 14.20 |
| Bank loan paid into the account | Liability | 10,000.00 |
| Owner's capital contribution | Equity | 3,000.00 |
| Refund of an expense previously paid | Reduces an expense | 85.00 |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Counting a loan or the owner's own money as revenue because it arrived in the bank account.
- Reading a rise in revenue as a rise in profit without checking what happened to costs over the same period.
Related terms
Related service
Small business bookkeeping
Your books kept current, every month.
Sources
- Key financial terms
business.gov.au, Australian Government. Current at 15 October 2026, released 9 July 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.
- Choose between cash and accrual accounting
business.gov.au, Australian Government. Current at 15 October 2026, released 13 September 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.
- Record keeping
business.gov.au, Australian Government. Current at 15 October 2026, released 7 November 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.
- Overview of record-keeping rules for business
Australian Taxation Office. Current at 18 June 2026 (QC60718), released 18 June 2026. Checked 15 October 2026.
© Australian Taxation Office for the Commonwealth of Australia Licence: ATO website copyright notice (copy, adapt and distribute, without implying ATO endorsement).