This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

cash flow vs turnover

imanhabib1
Posts:3
Joined:Sun May 21, 2023 12:16 am
cash flow vs turnover

Postby imanhabib1 » Mon Jul 03, 2023 5:40 pm

Opening a business account requires to answer question regarding the company's turnover. Is cashflow and turnover the same in the case of an agency providing services such as finding the best deals and making commission. I.e. My company finds the best deal and the customer purchases the equipment from us while we do not own it. We then use the transferred funds from the customer to purchase the machinery from the wholesaler for a lower price. Therefore is my turnover the total capital coming in and out of the company such as cash flow or the total commission we make in the year is considered company's turnover?

pawncob
Posts:5084
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: cash flow vs turnover

Postby pawncob » Tue Jul 04, 2023 10:17 am

I think you have to decide if you're trading (buying and selling goods) or acting as an agent.
https://ifrscommunity.com/knowledge-base/principal-vs-agent-revenue-gross-vs-net/

As it relates to a bank account, and presumably all purchases/sales go through that account, the bank will probably require the cash flow figure.
With a pinch of salt take what I say, but don't exceed your RDA


Return to “General”