How Do You Calculate Net Credit Sales?
The amount a company makes from its sales is not based on just the amount of revenue its products bring in. Other factors must be considered, including the money paid out for returns and any discounts offered due to customer complaints. When these amounts are deducted from a company’s sales, it is referred to as the net credit sales total. Determine the amount of gross sales that your store made during the time period for which you wish to calculate the net credit sales. Typical time periods include one month, one quarter or one year. Assume the gross sales were $75,000 for the year. Determine your sales return number for the same time period as your gross sales. The sales return number is the amount of money a company paid back to customers in exchange for products the customers returned for a refund. Assume a sales return total of $5,000 for the year. Compute the sales allowance for the time period. This is the amount of the discount you provided to customers off future purchases in
