Understanding the Differences
Managing your business finances effectively starts with knowing where your money is coming from and where it's going.
Two key reports that help with this are the sales report and the payments report. While both provide important financial insights, they don’t always match up and that’s completely normal.
In this article, we’ll break down the differences between these reports and explain why they might show different numbers. This way, you can better understand your business’s financial health and avoid confusion when reviewing your finances..
Sales Report
The sales report provides a clear summary of all the charges billed during a specific time period.
It includes all sales, regardless of whether the payment has been received or not. Keep in mind that this report is based on the date the sale occurred, not when the payment was collected.
For example, if a sale happens today, it will be recorded in today’s sales report, even if the payment is received at a later date.
Payments Report
The payments report provides a summary of all payments received within a specific period.
Unlike the sales report, it only includes payments that have actually been received, regardless of when the sale occurred.
For example, if a customer pays today for a purchase made last week, that payment will appear in today’s payments report. However, the sale itself will still be recorded in last week’s sales report.
Differences Between the Two Reports
Now that we’ve covered the basics of sales and payments reports, let’s break down the key differences between them.
1. Sales vs. Payments
The sales report includes all recorded sales, regardless of whether payment has been received. In contrast, the payments report only shows transactions where payments have actually been made.
Because of this, the total in the sales report may be higher than in the payments report, as some sales may still be unpaid.
2. Timing differences
The sales report is based on the date a sale was made.
The payments report is based on the date the payment was received.
This timing difference means that the two reports may not always align, especially when payments are delayed.
3. Sales and payments don’t always happen together
A sale and its corresponding payment may occur on different days. For example:
If a sale was made on October 11 but the payment was received on October 14, the sales report for October 11 will show the full sale amount, but the payment will only appear in the payments report for October 14.
If you were to run a payments report on October 11, the payment wouldn't appear because it hadn’t been received yet.
📌 The sales report is best for tracking total sales within a specific period.
📌 The payments report helps monitor cash flow and see when payments are actually received.
By understanding these differences, you can better analyze your financial data and ensure accurate reporting.
The payments listed on the sales report are dynamic.
The Paid & Due columns are changing and updating as payments are received for these sales which can originate from one or many payments of different periods.
Looking at the payments report from 11 to 14 October, we see that the payment date is reflected on 14 October.
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Business Implications
What does it mean if the Total Sales for a period is higher or lower than the Total Payments for the same period?
If your Total Sales is higher than your Total Payments...
Your Total Outstanding Debt is increasing!
If your Total Sales is lower than your Total Payments...
Your Total Outstanding Debt is reducing!