When it comes to business, revenue is one of the most important assets to success. It may seem like a no-brainer but many facets of finances actually play into your bottom line. In fact, revenue doesn’t come as easily without a solid understanding of where those profits come from. Data is the newest currency. Because from it, you learn ways to either save or make more of the green stuff. That said, we are sharing how to categorize revenue to boost your business’ finances.
Firstly, what is a revenue category?
If you aren’t already categorizing the different ways your organization brings in cold hard cash, you’re missing important data that could help your bottom line. A revenue category describes a source of your organization’s revenue. You may think a day’s income is sufficient enough, but within every purchase a customer makes, there is more and more data that can be identified. For example, a restaurant could simply close out the tills at the end of the night and have their manager report earnings for the day, but, breaking down each meal or each menu item could provide valuable data that proves to be your biggest money-makers.
This is one of the many things we comb through and identify with our thorough (and conveniently virtual) bookkeeping and book cleaning services. We offer an objective third party look through financial statements and, from there, make suggestions and ask questions to provoke new lines of thought for the bottom and top-line strategies. When working with restaurants, for instance, we like to break down revenue categories that highlight what is bringing in the greatest sources of revenue. Here’s how we would recommend you categorize revenue.
Consider categorizing different streams of revenue.
Consider categorizing different streams of revenue like breakfast, lunch, dinner or appetizers, entrees, beverages. There are obviously many different ways to mine data, but by itemizing these individually, you are able to see which meals or which menu items are your biggest sellers and which are perhaps costing you more in effort than in revenue.
Let’s say, hypothetically, it is clear from your data that a breakfast menu item is consistently the most ordered. Even on your slowest day of the week and has been for a number for months. You can take this information and make adjustments to your operations to increase marketing. Perhaps you offer a promotion to get more customers in the door for this highly-favored dish. Maybe you decide to offer a special to entice any even higher volume of sales with this foodie favorite. Whatever your decision may be, your data provides a clear picture, indicating that if you want to see a difference in numbers, there should be action taken.
Categorize Revenue to Boost your Business’ Finances.
The most successful business owners know the importance of leveraging sales data to benefit their business. Hiring professionals like us at Two Sense Consulting allows you to regularly evaluate menu items to guide future decisions. We look at the sales performance of individual items and work with you. We ask the important questions like, which items were the best sellers, what sold, what didn’t sell and so on.
With Two Sense, you can have all of the data you need at your fingertips. Our accurate reporting allows you to see a clear view of your operations. View real-time sales data, inventory, customer data, employee insights, and more with our services. We are here also for a free consultation to further explore how working with us can help you turn data into dollars.
