Neste artigo
Turnover represents the total revenue generated from a company’s core business activities over a specific period. In simple terms:
- it is the value of goods sold
- and/or services rendered
Turnover does not measure profit, only the volume of activity carried out.
Who the revenue-based method is for
The revenue-based method, grounded in the accrual principle, is suitable for structured companies and businesses with many clients and suppliers who need a complete and time-comparable economic view, including receivables and payables. It is also required for all businesses with an annual turnover over CHF 500,000 (in Switzerland).
This approach is typical of accrual accounting, used to produce complete financial statements during the year.
What is included in turnover
Turnover includes:
- sales of goods
- services provided
- revenue linked to the company’s main business activity
Turnover does not include:
- collected VAT
- financial income
- extraordinary income
- grants or compensation not related to sales
Turnover is therefore an economic figure, not a financial one.
Turnover, revenue, and profit: differences
It’s important to distinguish between some commonly confused terms.
- Turnover
Measures how much you have sold. - Revenue
May also include income other than core sales. - Profit (or loss)
Is the difference between revenue and expenses.
High turnover does not automatically guarantee a profit.
How turnover is calculated
Using the accrual method, turnover is based on sales that have accrued during the period, regardless of whether they have been paid.
In practice:
- a sale counts towards turnover when the right to revenue arises
- even if the customer hasn’t paid yet
This results in turnover that is:
- economically complete
- comparable over time
- independent from payment timing
Turnover and VAT
With the turnover-based method, VAT is declared at the time the invoice is issued, regardless of whether the customer has paid or not.
- This is the standard method used by most businesses and generally required under Swiss VAT practice.
Turnover is not the same as VAT:
- Collected VAT is not revenue
- It is an amount collected on behalf of the tax authority
VAT rules depend on each country’s legislation.
Why turnover is an important figure
Turnover is used to:
- assess the size of the business
- compare different periods
- define tax and administrative thresholds
- analyze sales trends
make strategic decisions
However, it is not sufficient on its own:
- it says nothing about costs
- it does not measure profitability
- it does not indicate available liquidity
Turnover in Banana Accounting: role of invoices
In Banana, turnover is determined by revenue entries, which come from the recording of customer invoices (not from bank transactions themselves).
Bank movements serve to settle receipts, not to define turnover — except when using the cash method.
- In Banana Accounting, turnover is determined through the posting of customer invoices, meaning transactions that generate revenue.
- Turnover is not a manually entered value and does not depend directly on the bank account, but on the entries in the revenue accounts.
When you post a customer invoice in Banana:
- revenue is recorded
- the revenue contributes to the turnover of the period
- VAT is handled separately
- the customer receivable is recorded (if required by the method)
Turnover is therefore generated at the moment the invoice is recorded, not when payment is received.
In summary
In Banana Accounting, turnover:
- comes from the posting of customer invoices
- is determined by revenue accounts
- may follow payment or invoice issuance, depending on the accounting method
- is independent of the bank account, except in the cash method
This setup makes turnover clear, verifiable, and consistent.