Turnover
The total sales revenue a business earns over a period, before costs are deducted.
What it means
Turnover is the total value of sales a business makes over a period — the top line of your profit and loss statement, before any costs are taken out. It is often used interchangeably with revenue or sales.
Turnover measures activity, not profit. A business can have high turnover and still struggle if margins are thin or customers pay slowly.
Turnover versus cash
Recording a sale increases turnover immediately under accrual accounting, but the cash only arrives when the customer pays. That gap is why strong turnover can still leave a business short on cash. See gross margin to understand profitability, and debtor days to gauge how quickly turnover becomes cash. Note that turnover can also affect tax and GST obligations — check with the ATO or your accountant.
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