How to calculate net revenue step by step,,,,,,,
Net revenue calculation starts with gross revenue and subtracts direct sales deductions like returns, discounts, and allowances.
This step-by-step process ensures accurate tracking of retained sales income, vital for hospitality revenue management.
Step-by-Step Guide Follow these sequential steps using data from your Property Management System (PMS) or POS reports:
Determine gross revenue:
Sum all sales from rooms, F&B, and services before any adjustments.
Calculate returns:
Add up guest refunds or cancellations, such as no-show room charges.
Tally discounts and allowances: Include promotional discounts, comps, or sales allowances for defects.
Subtract deductions:
Net revenue = Gross revenue – (Returns + Discounts + Allowances).
Example in Hospitality A hotel records $100,000 gross revenue from 500 room nights at $200 average daily rate. Subtract $5,000 returns (cancellations), $3,000 discounts (promos), and $2,000 allowances (complaints), yielding $90,000 net revenue.
Tracking Tips Reconcile daily via PMS for real-time KPIs.
Use spreadsheets or revenue software to automate, aiding forecasting and cost control in hotel operations.