Questions

Counting sales as revenue doesn't work in GAAP but do VC's care that sales and revenue are different and do they use revenue and sales interchangeably?

Actually this is an accounting issue commonly referred to as "revenue recognition". How you recognize and record sales is dictated by both the tax regulations and corporate policy.

Go to the website of your national government tax agency and input "revenue recognition".

As long as you comply with generally accepted accounting principles (GAAP) most likely be fine. But FYI, we recommend our portfolio companies track revenue as money in the bank and sales as part of the sales funnel.


Answered 9 years ago

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