Understand Gross Sales and Net Sales

What is the difference between Gross Sales and Net Sales?

Gross Sales Defined

Gross Sales is the total of all item sales for the time period. This does not include things like taxes or service charges, only items sold. Gross Sales represents only the menu items people are buying, so you may see spending that does not attribute to Gross Sales such as: Tips, Taxes, Service Fees/Charges, Gift Cards. These items would be reflected in Payments reporting because payments were made but items weren't sold.

Net Sales Defined

Net Sales is Gross Sales minus promotions, both item and check level promotion. Item level promotion will affect item level net sales, but check level promotion will only affect total net sales, see below for more explanation.

Understanding How Promotions & Voids Affects Gross/Net Sales

Promotions

A promotion is any transaction where a cost is incurred for the business but is not fully paid for by the customer.

Example: giving a VIP guest a free bottle of wine is considered a promotion or giving a client 50% off all cocktails during happy hour.

All promotions are factored into gross sales and can be seen as % of gross sales, but are factored out of net sales.

Item vs Check Promotions

Avero recognizes two different styles of promotion: Item promotions (e.g. 50% of an appetizer) and Check promotions (e.g. 50% of your entire meal). When looking at a category report, for example, we do not apply Check promotions to specific categories or items. This is because they impact the entire check, regardless of what items are ordered. So it may appear that Gross and Net Sales are the same on each row because there were no Item promotions during this time period impacting specific categories but the adjustment to Gross and Net Sales would be seen at the bottom of the report in the totals.

Voids

A void does not incur a cost.

Example: a void could be an item that is ordered but then cancelled before it is made and therefore incurs no loss.  

A void is not factored into gross or net sales because it does not have any monetary value attached to it. Voids can be tracked to identify moments where time is being wasted.