By service revenue is most often defined as a company’s revenue generated from the use of one’s time and effort. The word service is often used with the idea that it is a positive thing. However, service revenue is not always a positive thing. Service revenue can include things like travel, labor, and consulting fees.
Service revenue can include those items because it’s not always a positive thing. For example, I was doing a presentation in a corporate setting in the summer of 2009 where I was asked to do a presentation for an internal meeting. I was a bit nervous. “What happens if I forget to mention that? I’ll be fired!” The answer was, “I’ll be fired if I mention it.
The fact is that service revenue can be a positive thing. Service revenue is the percentage of revenue that a service or service member actually receives. This is a good indicator that service revenue is a positive thing. If you have a service that receives a percentage of revenue that is positive, that percentage doesn’t just go up.
We’re not talking just about the percentage of revenue that someone receives. We’re also talking about a service member’s actual revenue. That could be anything from consulting to a new software application. Service revenue is pretty much the number on an invoice, minus the cost of the service.
Members that have a service that gets a portion of revenue that is positive can be expected to get a much smaller percentage than those that dont. Because what they get paid is less.
Service revenue is one of the most important factors in a business. A service member who has to take out a large percentage of their annual pay to pay for a service (whether it’s a new software application or consulting) is going to want to make sure that they are getting their money’s worth.
That’s not to say that a service revenue is zero. Service revenue is a percentage of the total income earned from the service. It is a very important factor in the financial picture.
To find service revenue to understand how it looks on a balance sheet you have to pay attention to how much the service pays for each service member. This is not the same as saying that only a service member who has bought the service should have to pay for it, because it is the provider that should be paying.
Service revenue is usually written out as a percentage of total revenue. This usually indicates whether the provider is a sole proprietorship or an LLC.
Service revenue for a sole proprietorship is usually written as a percentage of the total number of customers and is written out as “Net Revenue.
