To understand the health of your business, you must learn how to project monthly sales. When you have an idea of your projected monthly sales, it helps you detect trends that impact your monthly gross profits and net income. Calculating these amounts accurately will enable you to quickly judge whether you are operating a successful business or losing money.
How to Calculate Projected Monthly Sales
If your business is entirely reliant on sales to generate income, you can refer to a simple formula:
- Projected Monthly Sales – Projected Monthly Expenses = Projected Monthly Revenue (Net Income)
So you want to estimate your projected monthly sales and projected monthly expenses. How can you do that? Well, you will need to keep track of your sales, cost of goods, and other expenses from one month to the next. These amounts allow you to use historical data to estimate your future sales and earnings.
Projected Monthly Sales vs. Projected Monthly Taxable Sales
If your business sells both non-taxable and taxable goods, you may be wondering if there is a difference between projected monthly sales and projected monthly taxable sales. There is. You will want to estimate the total projected sales from your non-taxable and taxable products sold, while your protected monthly taxable sales should exclude non-taxable transactions.
Steps to Calculate Projects Monthly Sales
To find out how to project monthly sales for your business, we invite you to review the steps in the following infographic.
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