What is Net Sales and How Nethunt CRM Can Help You Track Them

Originally published October 16, 2024, updated October 17, 2024

Stop crunching numbers — learn what is net sales and discover your true revenue potential.

Have you ever struggled to figure out how much your business really made after all those deductions? Is there a magic net sales formula that helps you crack the code and see the real numbers behind your revenue? Well, not exactly magic — but with the right tools, like NetHunt CRM, tracking net sales is easier than ever.

Whether you’re an e-commerce business or a brick and mortar store, you still need to know what net sales are and how to calculate them in order to operate your business efficiently. This knowledge helps you see your true revenue and timely adjust your sales and marketing strategies for growth.

Let’s find out what net sales is, how to calculate it, and why a CRM solution like NetHunt can help you stay at the top of your net sales game.

What is net sales and why it matters in business

Net sales is the revenue a business earns at the end of a specific period, after deducting refunds, discounts, and allowances.

How to determine net sales so it’s simple as ABC? Well, if we try to define net sales in a few words, that would be your ACTUAL REVENUE.

A business sells goods and services. As a result, it generates revenue often referred to as 'total income' or 'gross income.' There are a lot of expenses that may occur during the sales process. These are allowances, discounts, and refunds. Once you deduct all the business-related expenses, you get your net sales number — your actual revenue.

Sometimes, you’d see people use gross sales vs net sales and net sales vs total sales as synonyms. Are net sales and revenue the same? Yes, if we mean ‘actual revenue.’. Is total revenue the same as net sales? No. Remember once and for all — gross sales and total sales are interchangeable as they are net sales plus deductions combined. They paint you a rosy picture, making you believe that your business sells more than it actually does. But once you take the gross aka total sum and deduct all the expenses, you get the net sales figure — the accurate picture of the revenue your sales are bringing.

You can measure your net sales over weekly, monthly, and annual accounting periods.

But why do you even need to know how to find net sales? Before we teach you the net sales calculation in the next section, let’s find out why knowing your net sales metrics matters:

• Offers you a true picture of your revenue without the fluff
• Helps you make strategic decisions regarding pricing, inventory management, and product offerings
• Helps you uncover new trends and opportunities, hence boost your marketing strategy
• Ensures you set realistic sales targets and growth objectives
• Helps you benchmark your performance against competitors

Now when you know what nets sales is, let’s move to the next part – the net sales formula.

How to calculate net sales: An easy step-by-step guide

Rest assured, there is no need for special training for sales managers to know how to calculate net sales. The net sales revenue formula is as simple as it sounds:

Gross profit (aka total profit) - expenses = Net profit

Yeap, we promised you that would be easy. Now when we’ve found the answer to ‘What is net sales?,’ let’s find out what expenses can end up in your sales report. Because, honestly, what is sales report without a good grasp of your business expenses? A statement of no use to anyone in your company.

So, the most common types of expenses to put on your income statement would be:

• Operating expenses — the day-to-day costs of running your business, such as rent, utilities, and office supplies.
• Marketing and advertising — digital marketing, social media campaigns, etc.
• Salaries and wages — in other words, the compensation for your team.
• Depreciation — the reduction in value of your assets over time. For instance, the machinery valued at $50,000 depreciates $10,000 each year for five years. And before you ask ‘Is net sales an asset?’ the answer is no, it’s not 🙂
• Insurance — premiums paid to protect your business against risks.
• Taxes — does net sales include tax? Yes, it does. These often include income tax, sales tax, and payroll tax.
• Refunds — amounts returned to customers after a purchase (typically happens when a customer isn’t satisfied with a service or a product and asks for refund).
• Discounts — price reductions offered to customers to encourage short-term sales.

Now let’s illustrate how to find net sales with a quick example.  Let’s say your gross profit for the month is $100,000. After accounting for $30,000 in operating expenses, $5,000 in marketing, $20,000 in salaries and $18,000 in other categories from the ‘Expenses’ list, your total expenses would be $73,000.

Let’s subtract it from the gross profit: $100,000 - $73,000 = $27,000

Yeap, the monthly net sales in this case would be $27,000.

Well, now you know how to get net sales amounts with a simple but effective formula. Now let’s find out why knowing your net sales is a make-or-break factor if you want to succeed.

What is net sales in business reporting

In the harsh business world, net sales is akin to a compass. Knowing your net sales figures helps you understand your current company’s performance and make smarter financial decisions in the long run. In other words, it adds clarity to your company’s income statement.

In case you’ve wondered ‘Where is net sales on income statement?’ — you'll find it listed near the top, just below gross sales.

Meanwhile, let's talk about how knowing your net sales figure on a monthly sale report changes things for your business. When you know you actual revenue figure, you can:

• Spot revenue trends easily. For example, a retail business might compare net sales from holiday seasons to identify when demand peaks. As a result, they can plan inventory and staffing better.
• Identify your top product performers. Net sales vs revenue calculations (‘total’ revenue in this case) allow you to see which products are pulling in the most money, after all discounts and returns.
• Set realistic sales targets on past performance. Let’s say a retail business experienced a $200,000 revenue boost during the last back-to-school season. This year, they could aim to increase net sales by 15% by launching promotions earlier.
• Adjust pricing with precision. If discounting is hurting your profit margins, net sales insights help guide your next move. They’d tell you whether you should tweak prices or fine-tune promotions to make sure profitability stays on track.
• Measure growth over time. It’s as simple as it sounds. Consistent sales increases? You’re heading in the right direction. Sales declines? Time to rethink strategy.

Yep, while gross or total sales numbers might sound too good to be true, net sales keeps things real. But how to calculate net sales from income statement with top accuracy? With the right tools. And here they are.

This is how CRM helps track and calculate net sales with top precision

Integration of sales data for centralized sales management

A CRM solution acts as a central hub for all your sales data management in many cases. It integrates your sales data  from multiple sources like invoices, discounts, returns, and customer interactions. In the end, there is no need to chase down numbers across different spreadsheets or platforms — everything is stored, organized, and ready in one place.

Automation and accuracy for optimized sales processes

CRM systems leave no room for mistakes as they automate sales tracking. Businesses can apply discounts, process returns, or account for allowance with top precision — again, all thanks to sales process automation. For instance, when a customer returns a product, the CRM can automatically adjust the net sales figures. It deducts the returned amount in real-time and ensures your financial data is always up-to-date.

Real-time reporting for timely business decisions

Forget waiting for end-of-month reports. CRMs offer real-time insights into your net sales metrics with dashboards and customizable reports. On dashboards, you can see metrics like total net sales, average transaction value, and sales growth rates. They help you compare the current month’s net sales to previous months and identify any big fluctuations in time.

Meanwhile, users can filter data by date range, sales representative, or customer segment with customizable reports to boost their marketing efforts.

Improved client and sales management strategies

A CRM doesn’t just track numbers — it tracks relationships. Are certain customer segments returning more products? Are your high-value clients benefiting from specific discounts? You can get answers to all these questions with detailed analytics and reporting in your CRM.

Hold on! There are more amazing things that a CRM can help you with when it comes to client and sales management. You can:

• Categorize customers based on various criteria
• Store detailed customer interaction histories
• Automate follow-ups based on customer interactions
• Forecast future sales trends based on past sales data
• Track feedback from surveys or reviews to gain deeper insights into customer sentiment

Now let’s discover how one particular tool called NetHunt CRM can help you stop asking ‘How to calculate net sales?’ and automate your sales game once and for all.

How NetHunt CRM can level up your sales tracking capabilities

Customizable fields for accurate and relevant sales data

Users highly value NetHunt CRM for its ultracustomizable fields. Whether you're looking to automatically track gross sales, returns, discounts, or any other factor, you can create fields that fit your unique sales model. For example, if your business has specific seasonal discounts or unique product categories, you can set up fields to track these elements closely.

Other elements, such as a ‘Formula’ field, help you directly calculate net sales in the system. If your CRM records have 'Expenses' and 'Revenue' fields, you can create a 'Net Sales' field that will serve as your actual formula in the process.

Advanced automation for optimized sales process management

With NetHunt CRM, sales automation becomes your new best friend. Imagine leads from your website or social media automatically populating your CRM — no more manual entry or lost opportunities.

This is how NetHunt CRM supports each stage of the sales process with smart automation:

• Lead generation. NetHunt CRM captures leads automatically from various sources, including websites, social media, and other channels. The tool captures the essential details like first name, last name, email, etc., and directly logs them into the system.
• Lead nurturing. With built-in marketing tools, you can create multi-channel sequences that nurture leads effectively. For instance, you can set up automated drip campaigns to engage prospects with personalized emails, hence move them faster along the sales funnel.
• Sales pipeline management. As leads progress, NetHunt CRM intelligently updates their status. For example, when a lead engages with your campaign, their status automatically shifts from "New" to "Negotiating." This real-time tracking keeps your team informed and ready to act.
• Task pipeline management. As deals progress, NetHunt intelligently creates tasks and assigns them to team members.

Sales reporting tools for building business strategies that work

Forget waiting weeks for reports! NetHunt CRM’s reporting tools help you generate detailed reports that monitor net sales trends and track performance metrics like revenue growth and customer acquisition costs.

You can integrate NetHunt CRM with Looker Studio (former Google Data Studio) to build interactive reports and dashboards and share them with your team.

Automated interaction management for higher customer satisfaction

NetHunt CRM excels in multi-channel sales. It doesn’t matter whether you communicate with customers via email, messengers, or LinkedIn — NeyHunt keeps every bit of your communication in the Timeline so you can have a complete overview of your customer interactions.

The system is also great for handling deal hand-offs. If a new manager takes over a deal, they’ll have all the information they need at their fingertips

This approach not only leads to happier customers but also reduces the likelihood of product returns, hence increased net sales.

How tracking net sales with CRM can boost your business growth

Well, first of all, a CRM helps you calculate net sales without the hassle of manual calculations. It automatically integrates data from various sources and offers real-time insights into your net sales figures. This means you can stop wondering ‘Is net sales the same as revenue?’ and focus on managing your ACTUAL funds.

Also, there are other ways in which tracking your net sales with a CRM solution helps you grow faster. Here they are.

You can focus on both revenue and customer satisfaction

What are net sales bringing to your business if not a deeper understanding of your customers? Net sales help you find out whether your services and products resonate well with your target audience. Once you analyze sales data alongside customer feedback, you can identify not just what products are selling, but also how well they’re meeting customer needs. And if they don’t meet your customer needs — you can quickly adjust your marketing approach.

You can use real-time data tracking for agile strategies

The beauty of CRM systems lies in their ability to provide real-time data tracking. This allows businesses to adjust their strategies on the fly. Imagine launching a marketing campaign and seeing immediate responses in your sales figures. With real-time insights, you can optimize your outreach strategies or shift budgets as needed.

You can improve financial forecasting

Most CRM solutions come with built-in reporting and data analytics features or integrate with other data analytics tools. They allow you to use the past data and generate reports that highlight trends, sales patterns, and customer behavior over time. You already know how to calculate net sales. After you do it with a CRM tool, use the power of analytics to identify key performance indicators and project future sales and revenue.

You can boost team performance

With clear visibility into net sales data, you can set specific, measurable goals for your sales team. You can track individual and team performance against these targets, set tasks, and analyze performance metrics.

The best part? A robust CRM solution like NetHunt CRM brings automation to the table — based on the deal progress updates, NetHunt creates tasks and assigns them to team members. In the end, no deal gets stuck in the pipeline as your team timely follows up with leads and responds to inquiries.

Bottom line

Now you may no longer wonder ‘What is net sales?’ or ‘Is net sales the same as net income?’ as you already have the answers in the article. Anyway, understanding and tracking net sales is a must if your aim is to have a clear view of your business's true revenue.

Meanwhile, you can level up your net sales game with a CRM solution like NetHunt CRM to efficiently manage and track your sales data with top accuracy and real-time insights. Plus, you won’t have to compromise the quality of your customer relationship management, as NetHunt CRM helps you excel in both areas.

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