Revenue by What You Sell
Most businesses that sell services cannot answer a simple question from their own books: how much did we earn from services last quarter, and on what margin? Here is what it takes to answer it, and where each part lives.
Ask a hardware distributor how much of last quarter's revenue came from installation and you will usually get an estimate. The invoices are all there. The installation lines are on them. But the revenue went into one sales account, the lines were typed by hand, and the only way to separate them is to read every invoice.
Three things have to be true to answer the question properly. The service has to be a catalogue item, so it can be counted. Its revenue has to land in an account of its own, so the ledger can answer. And the sales reports have to know what a service is, so they do not show its margin as nonsense.
An income account on the service
A service item can carry its own income account, chosen on the item form. Consulting can post to consulting income, maintenance to maintenance income, and training to training income, each set once on the service rather than reclassified every month.
On an invoice that carries only services, each line posts to its service's account. A service with no account set falls back to your general sales revenue account, so leaving the field empty is safe. Background on structuring the accounts themselves is in what a chart of accounts is.
Sales by item, with services in it
The sales-by-item report lists services alongside goods, tags them as services, and can be filtered to goods only or services only. That filter is the quarter's answer in one click.
Margin needs care. A service may carry a cost, meaning what it costs you to deliver, and if it does, the report shows a margin against it. If it does not, the report shows the margin as n/a rather than 100%. A hundred per cent margin on labour would be flattering and wrong, and it would pull the average margin for the period up with it.
A service with no recorded cost does not have a hundred per cent margin. It has an unknown one.
Custom reports
The custom report builder has item type as both a column and a grouping, so you can build a revenue-by-type report, or a services-only view of any sales dataset, without exporting to a spreadsheet. Where a custom report includes stock totals, add the type filter so services do not appear as zero-stock rows.
Where a cost on a service comes from when you buy it in is covered in a subcontractor's quote should not reprice your rate card, and the timing of the posting in the invoice that waited for a delivery.
The next questions a services business asks
Once services can be counted, the reports people ask for next are predictable.
Account split on mixed invoices
Post each service on a mixed invoice to its own income account, in the same single posting as the goods.
An expense account on the service
Choose on the form where each bought-in service books, so cost of delivery is reportable by service too.
A goods-versus-services summary
A standing report of revenue and margin split by type, by month.
How it works: you describe the requirement, we return a written scope, timeline and cost, and once agreed it is built into your workspace and maintained with the product.
Talk to us about reportingWhat AWRA OpsHub does today
- An income account on each service, chosen on the item form.
- Services-only invoices posted to each service's account, falling back to sales revenue.
- Services in sales by item, tagged, filterable, with margin shown as n/a where no cost is recorded.
- Item type in the custom report builder, as a column and a grouping.
More we can add to your workspace
- Per-service income accounts on a mixed invoice, in the same posting as the goods.
- An expense account picker on the service form.
- Stock totals in custom reports that leave services out without a filter.
- A standing goods-versus-services summary by month.
Where we point you to a specialist
- We will not show a hundred per cent margin for a service with no cost recorded. If you want a margin, record what the service costs you to deliver.
Each item in the middle column can be scoped for your workspace.
In one line
Give each service an income account and, where you know it, a cost. The ledger then answers "how much from services" and the sales report answers "at what margin", without anyone reading invoices.
Set an income account on your first service
The feature page shows the form.
See how service items workFrequently asked questions
Can a service have its own income account?
Yes. Choose it on the service item form. On a services-only invoice each line posts to its service account, or to sales revenue if none is set.
How does sales by item show a service with no cost?
Its margin is shown as n/a rather than 100 per cent.
Can I report services separately from goods?
Yes. Sales by item can be filtered to services, and the custom report builder can group by item type.
