What it means in practice
Revenue is not the same as cash received or profit. A credit sale can be recognised before the customer pays. A loan receipt increases cash but is not a sale. Use consistent definitions and periods when comparing reports. Where the accounting treatment is uncertain, ask the person responsible for the accounts rather than choosing the label that makes a dashboard look stronger. Define the reporting basis before comparing periods. A quotation, an order, an invoice and a receipt are different events. Depending on the accounting basis, the point at which revenue is recognised may differ from collection. Keep that distinction clear when discussing sales performance, and avoid adding borrowed funds or owner contributions to trading revenue simply because money entered the bank account.
A fictional worked example
A fictional invoice for ₦200,000 may relate to completed work even though the customer's payment arrives in a later period.
A useful question
Does the number in your sales report represent orders, invoiced work or money collected?
Read the practical guide