Sales And Earning Software

Written by Patricia Tunstall
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Sales and earning software takes sales activity analysis a step farther. "Earning" is another name for profit, and basically, sales and earning reporting means tallying all sales revenues and expenses to see if a profit has been made. In the income statement, the first of a three-part, annual financial statement, sales revenue and expenses are broken down into several categories by sales activity tracking software.

The first is the cost of goods sold expense, which is the total cost of producing the products which brought in revenue during the preceding period. Next is a wide-ranging category called sales, administrative, and general expenses, which consists of all expenses not reported in other categories. Interest expense is a third group, and income tax expense is a fourth.

Software Reveals EBIT

All these groupings are important information, but none are more important that the first two: cost of goods sold expense and sales, administrative, and general expenses. These are so significant they have a name, EBIT--earnings before interest and income tax. EBIT is a prime indicator of the financial health of a business.

"Expenses" is a complicated, wide-ranging classification that includes the expenses listed above, but also the cost of operating the company. Advertising and marketing costs are an important expense because these are necessary to generate sales, which produces revenue. Insurance costs, utilities, payroll, property taxes--these are all part of normal operating expenses that can be tracked using sales and earning software.


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