What is turnover?
- By Book Keeping Pros
- Sources checked 15 Oct 2026
Definition
Turnover is the total amount a business earns from selling its goods or services over a period, such as a month or a financial year, before any costs are taken away. It is often used as another word for revenue. It measures how much trading took place, not whether that trading made a profit.
Turnover is usually quoted for a whole year, as annual turnover, and it is taken from the sales lines of the profit and loss statement for that year. People use it in slightly different ways: some mean sales alone, others include every kind of income. When a buyer, lender or adviser asks for your turnover, check which they mean and which period they want.
The word also has meanings that have nothing to do with sales. Staff turnover describes how often employees leave and are replaced, and stock turnover describes how quickly inventory sells and is restocked. Neither is a figure from the sales accounts, so a report that mentions turnover should make clear which one it is talking about.
A large turnover does not tell you a business is doing well. Two businesses with identical turnover can end the year in very different positions, depending on what their sales cost them and what they spend to keep running.
In Australia
In business.gov.au's glossary of key financial terms, the entry for turnover simply points to revenue, which it describes as what a business earns before its expenses are taken away. The same glossary says the Australian financial year runs from 1 July to 30 June.
Its guide to valuing a business lists annual turnover among the financial information to have ready, along with financial statements such as cash flow and profit and loss statements, for the last 5 years if possible. It notes that a buyer may want to value the business independently, so it is worth having those documents organised and up to date.
Worked example
| Quarter | Sales (AUD) |
|---|---|
| Jul to Sep | 41,200.00 |
| Oct to Dec | 48,900.00 |
| Jan to Mar | 37,600.00 |
| Apr to Jun | 44,300.00 |
| Annual turnover | 172,000.00 |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Giving turnover for a calendar year when the person asking wanted the financial year.
- Forgetting to take away sales that were later refunded or credited to customers, which makes turnover look higher than it was.
- Mixing up sales turnover with staff turnover or stock turnover in the same report.
- Judging how the business is going on turnover alone, without looking at gross and net profit.
Related terms
Related service
Management and cash-flow reports
Monthly reports that show where the business stands.
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.
- Value your business
business.gov.au, Australian Government. Current at 16 October 2026, released 11 July 2024. Checked 16 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.