According to the Small Business Trends, a number of (small) businesses bought and sold in 2018 hit the record level. The total number of enterprises purchased that year amounted to over 10 312 small businesses. Imagine how many companies are still on the rise and make sales year after year. And while it may have been easy for some business owners to calculate their revenues, other businesses (especially the small ones) need to have the separate accounting for their contra revenue to get the accurate financial statements or records. To help you with that, we have prepared different types of accounting-related templates that can be of great help in determining your business’s contra revenue.
10+ Contra Revenue Templates in AI | Google Docs | Google Sheets | Numbers | Pages | Excel | Word | PDF
1. Annual Sales Report Template
This Annual Sales Report Template allows you to make a sales report of your business every year. With that, computing your contra revenue will be quick and easy. You can start editing the template as you download it in Google Docs, MS Word, Editable PDF, and Pages file formats.
2. Accounting Balance Sheet Template
Get to create a more detailed accounting of your sales, revenues, and expenses with the help of our ready-made Accounting Balance Sheet Template. The template is made available in A4 and US print sizes, perfect for commercial as well as personal printing. Make haste! Download it now!
3. Daily Sales Report Template
Are you looking for a template to input your daily sales report? Perfect! Our print-ready Daily Sales Report Template is what you are searching for. By using Google Docs, MS Word, Pages, and Editable PDF, this template is fully editable and 100% customizable. What are you waiting for? Download the template immediately!
5 Steps to Determine a Contra Revenue
Step 1: Grasping the Concept
If we only rely on its basic definition, the term “contra revenue” is a difficult concept to understand. And from an accounting standpoint, people would easily grasp the concept when it is well-illustrated through a situation. For example, in a given week, your mobile phone store sells 150 cellphones for $312.60 each. In your income statement, you have recorded a total revenue of $46 890. However, the other 50 pieces of the mobile phones sold were returned, and your customer asked for a $15 630 refund. If you’re going to record and tally it in your income statement, you will just record $31 260, which is the total revenue of the 100 pieces of cellphones sold. But it misstates the volume of your mobile phone business because you didn’t actually sell a hundred pieces.
You sold a hundred and fifty pieces of cellphones, only that the other fifty were returned and refunded. So in your income statement, you need to put two separate sections to get the gross sales revenue (which is $46 890) and the sales return (which has a negative balance of $15 630). In this instance, your sales return is your contra revenue, and it offsets your gross revenue.
Step 2: Determining the CR Accounts Types
Generally, there are three typical contract revenue accounts types. The first is the sales returns. This type refers to an account that contains the allowance for or the actual amount deducted to the returned product/s. The second type is the sales allowances. It happens when there are defects, and the company needs to sell the products with some rebates or allowances. The third one is the sales discounts, which often given to customers who purchase the products in a cash mode. Businesses offer a cash discount for prompt payments.
Step 3: Calculating the Contra Revenue Formula
To calculate your contra revenue, you need to follow a basic formula: Contra Revenue (CR) = Gross Sales – Net Sales. The gross sales may refer to the total of all the sale transactions in a given period. In the example provided above, your total weekly gross sale or purchase is $46 890. On the other hand, the net sale is the sale rebate or allowance. It is the amount deducted to the total gross sale due to returned, defective, and discounted products.
Step 4: Learning the Pros and the Cons
Everything, no matter how little we considered it is, has its advantages and disadvantages. On the positive side, the accounting of contra revenue can significantly affect many things. Firstly, it could potentially provide a well-detailed financial record in your income statement. Secondly, your business could have an estimate of the quality of the products based on the sales return and the sales amount. Thirdly, when your business offers discounts, it increases the cash inflow and reduces debts. And lastly, when the company gets the prompt payment from the sales discounts, the collection of efforts of the business staff will decrease.
Aside from the pros, we also need to consider the cons or the advantages of such contra revenue accounts. Undoubtedly, when you are producing products which have higher market competition, then, the policy of sales returns, allowances, and discounts should be maintained. In effect, you need to allot more time and a cost to account for such business transactions. Other than that, the profit and the profit margin of your business will possibly go down.
Step 5: Maintaining a Separate Accounting
As you have seen in the first four steps, the message is clear: any business should maintain a separate accounting example for their contra revenue. If you want a better presentation of your business’s financial statements or records, and you need to estimate the quality of the products your company has produced, then you have to follow this last step and make a different contra revenue accounting.
4. Monthly Sales Report Template
Record your monthly sales report through the use of this Monthly Sales Report Template. By this template, you’ll also be able to calculate your monthly contra revenue in case there are discounts or defects of your products. You can easily personalize it using MS Word and Pages file formats. If you need this template, download right away!
5. Sales Trip Report Template
Make use of the preformatted content of our Sales Trip Report Template to draft a professional-looking sales trip report to submit to your employer. It is readily available in A4 and US print sizes. Need a copy of this one today? Download now to start the editing process!
6. Monthly Financial Management Report Template
Get to manage your finances every month using this Monthly Financial Management Report Template. The template comes with original content and a layout that you can keep or modify to the advantage of your business. You may download this template and edit it in MS Word and Apple Pages.
7. Free Sales Report Template
If you’re looking for a free report template to monitor your business’s sales, then this Free Sales Report Template is what you need to download. By using an Illustrator file format, modifying and editing this template is much quicker and easier. What are you still looking at? Download it now!
8. Free Balance Sheet Template
Balance sheets are effective tools to define and describe the company’s assets, liabilities, and expenditures. Hence, this template is what you need to get your hands on. Hurry! Download this Free Balance Sheet Template now for free!
9. Free Monthly Sales Activity Report Template
In Google Docs, Google Sheets, MS Excel, MS Word, Numbers, Pages, and Editable PDF, this Free Monthly Sales Activity Report Template can be easily personalized and modified. Monitoring the monthly sales activity of your business has never been this simple and easy with the help of this template. So, don’t waste much of your time looking for something else. This template is what you need to download!
10. Balance Sheet Suggested Format
If you have no idea what a business balance sheet looks like, then this Balance Sheet Suggested Format is what you need to get. Pay attention to how a professional lays out everything in this document. You can get a copy in a Portable Document Format (PDF) anytime.
11. Sales Report Format
Download this Sales Report Format in a Portable Document Format (PDF) today and follow the layout to help you create a well-detailed sales report. Secure a copy now!