What are net sales?

Point of Sale (POS) Glossary

Net sales are the revenue a company makes from selling items. Net sales are calculated by taking the total sales (gross sales) and subtracting returns, allowances (damaged goods, expiration, loss, etc.), and discounts. It is the total sales price of the items minus their cost to the business.

Net sales is a critical component to calculating a company’s profit, however, overall profit must consider other operating costs, including advertising, labor, utilities, real estate, and more. A company’s actual profit must reflect the overhead and cost of facilitating sales.

A robust point of sale system can track all of the data needed to calculate net sales. Using POS analytics and reporting, it is much easier to get a reliable picture of a company’s net sales and overall profits.