Categories: BusinessEducation

Difference between Sales and Turnover

Main Difference

The terms of Sales and turnover are referred to the very same thing and due to this fact; they both are utilized very frequently on a profit and loss account interchangeably. From the word of Sales, we mean the total value of goods and services which are sold by a business. If a company sells its products in the form of units of items then it will calculate its sales by taking the total number of units sold of a particular multiplied by the selling price of that product. While in the case of services, the calculation of sales can be performed by calculating the hourly prices of services. The word of Turnover is generally used when the income generated by a company through trading its goods and services is calculated. The turnover is basically calculated over a specific time in which how much of the firm’s finished goods are traded. This time may be a week, 1 month, 6 months or yearly based.

Sales

The sales are referred to the exchange of money or commodities as paying the price of the goods and/or services. In order to accomplish the process of sales, the buyers and sellers must know the needs of each other and they should be agreed on a certain price. The total market value of the company’s goods and services which has been sold within the given time period is known as sales.

Turnover

The main purpose of the determination of turnover of a company is to manage the production levels and make sure that there should be no stock of the finished goods is left idle in the warehouses for the long periods of time. The calculation of the turnover is truly based on the type of business that the company is in. The turnover of the retail businesses will be the sales of the goods that are sold. But on the other hand, the turnover of a company of a consultancy services will be the value of the fees that is charged for doing well proposal wins. In the turnover calculation of a firm, its total trading income is calculated which includes those that arise from other activities which are not measured to be the foundation operations of that firm. The turnover is the measurement of the entire sales and after sales services which are provided on payment.

Key Differences

  • Turnover is a broader concept as compared to the sales because turnover includes other incomes as well which are not the primary business of the company.
  • The total value of the goods and services which are sold by a business during a specific time is called sales. The income generated through the procedure of trading the goods and services in which other incomes are also included is known as turnover.
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