Gross Income And Net Income
Hello everybody,
today I want to leave a note on gross income and net income from two standpoints: business and employee.
Gross income = Total sales - Cost of goods sold
Net Income = Total sales - Cost of goods sold - Selling expenses.
Because Gross income = Total sales - Cost of goods sold quite often Net income is recorded in this form:
Net Income = Gross income - Selling expenses
If some business had 1 000 000 $ sales and cost of goods sold is 600 000 $ and selling expenses are 250 000 then
Gross income = 1 000 000 - 600 000 = 400 000
Net Income = 400 000 - 250 000 = 150 000
But if you are an employee, then for you differnet definitions are applied.
Gross income = all salary without any deductions
Net income = what left for employee.
If a person has salary 1000, and 300 of deductions of taxes then his net income is 700 ( his selling expenses considered to be equal zero )
Understanding the nuances of gross and net income is crucial for both businesses and employees. If you’re leveraging Acumatica for your business operations, you know how powerful customization can be in streamlining financial processes and gaining deeper insights.
Do you have specific needs for customizing Acumatica to better track, analyze, or report on gross and net income? Or perhaps you have other unique requirements to enhance your financial workflows?
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