Turnover is the total revenue or sales of a business over a specific period. In some contexts, it also refers to how quickly inventory or assets are converted to sales.
Turnover has two meanings in business finance. The primary meaning is total sales revenue over a period - your business turnover is the gross income from all sales before any deductions. This is the figure used for determining GST/VAT registration thresholds, tax obligations and other size-based tests. For example, in Australia, you must register for GST if your annual turnover exceeds $75,000. The secondary meaning relates to the rate at which assets are cycled: inventory turnover measures how quickly you sell and replace stock, accounts receivable turnover measures how quickly you collect from customers and asset turnover measures how efficiently you use assets to generate revenue. Higher turnover ratios generally indicate better efficiency. Understanding both meanings of turnover is important for business management and compliance. SortBooks tracks revenue in real-time, giving you instant visibility into your turnover for compliance thresholds and business performance monitoring.
SortBooks helps with the bookkeeping behind turnover by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing turnover by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Revenue (also called sales, income or turnover) is the total amount earned from selling goods or services before any expenses are deducted. It is the top line of the P&L.
GST is a broad-based consumption tax applied to most goods and services. Businesses collect GST on sales and claim credits for GST paid on purchases, remitting the net amount to the tax authority.
Inventory refers to the goods your business holds for sale or uses in production. It is a current asset on the balance sheet and its cost flows to COGS when sold.
Accounts receivable (AR) is the money owed to your business by customers who have purchased goods or services on credit. It is a current asset on your balance sheet.
The financial year (or fiscal year) is the 12-month period your business uses for accounting and tax reporting purposes. It may or may not align with the calendar year.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.