KPI Context – Sales or Revenue or Both

One often encounters the scenario above while developing dashboards or reports. It is easy to be confused because many times these two terms are used interchangeably but essentially mean two different things.

Only difference between a measure and Key Performance Indicator is the meaning & context attached to it.

Depending on the audience the KPI Sales and Revenue will mean two hold different scales of importance, for example a CEO is interested in Sales first and Revenue second whereas CFO looks at Revenue first and Sales later.

kpi_sales_revenue_differenceSales and Revenue are interlinked measures. Sales as a KPI indicates the amount of “Expected Revenue” in the forthcoming future whereas Revenue as a KPI indicates the actual amount of “Sales Realized”. For example, A sale made for $10K in Jan-2016 might be fulfilled shortly, but actual money collected i.e. realization might happen in Feb-2016 or later. Due to this time difference, while reporting both metrics together time context plays an important role.

Sales is precursor for Revenue, which is monitored closely but not disclosed to public whereas Revenue is actual money in the pocket and disclosed to public through financial statements.