What are clean sale?
Net sales are the amount of sales provided by the company after certain deductions such as expenses have been received. The term may vary a bit depending on its company, but most companies distinguish net sales from gross sales . Hruby sales are simply a total of all sales without taking into account other factors.
Other factors that are determined when the company calculates clean sales may vary, but most often include two specific things. One is that people can return the items they have purchased, and this must be reduced from the gross amount of sale. Especially if the item is sold again, there may be difficulty calculating the actual amount of sales, as it may look as if there were two sales where there is only one sale, return and then selling the same item.
When some returned items are sold again, there is another common scenario when the item is returned because it is defective. It cannot be sold, but gross sales revenue will still be counted as sold. To obtain a clean amount, the returned defective items are deducted from the gross sales amounts so that the item is not incorrectly interpreted as profitably sold.
There may be other cases where the net amount drops further, including when discounts are accepted after sale. The woman buys a blouse and then notices that he is missing the top button. He takes it back to the store and, instead of returning it, asks to reduce the price. The trade could give a reduction, which would be a good way to maintain customer loyalty, but then it would have to deduct this reduction from net sales. Moreover, sometimes gross sales are calculated through the original prices of things. If these are discounted before selling them, it may be necessary to deduct discounts from gross to achieve net sales data.
term gross and net often relate to income and how much money the seller earns. Pure income and sales are usually two different things. Pure income refers to the amounts that the seller will do after all things such as employees, advertising, rent, public service accounts and et ctera have been considered. It is possible to have clean sales that appear to be profitable, but still has a net income that is not. If sales do not make enough to pay for all other costs of operation of the company, the seller can work with a loss. On the other hand, high net sales could indicate that businesses will be profitable companies and sell much more than the cost of running business.